Guidelines for assigning non-‘D’ rating to entities with an outstanding ‘D’ rating by other credit rating agencies
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Last Reviewed On: May 08, 2023 (Version 2)

Acuité Ratings adheres to SEBI guidelines for recognition of default in servicing of debt instruments. Nevertheless, there could be scenarios under which a non-‘D’ rating may be assigned by Acuité to some loans / debt facilities that carry an outstanding rating of ‘D’ from another credit rating agency (CRA):

  • The outstanding rating of another CRA is in the "Issuer Not Co-operative” (INC) category, implying the rating is not updated for the latest business, financial and liquidity position. Therefore, there is a possibility that the credit profile of the entity along with its liquidity position has changed significantly.
  • Even if the outstanding rating of ‘D’ from another CRA is not in the INC category, there is a likelihood that the past default has been cured and the client may be servicing debt in a timely manner for a considerable period extending from a few months to over a year.

Acuité follows its standardised mechanism to ascertain the liquidity position of an entity which involves analysing information on bank limit utilization, bank statements (to the extent available) and seeking banker feedback apart from a mandatory declaration from the client on its debt servicing status (No default statement-NDS).

In case of an existing ’D’ rating from other CRAs, validation and checks are carried out to establish issuer’s clean track record of timely debt servicing for a consecutive period of 3 months. The minimum requirement for ascertaining the liquidity position of the entity in such cases include:

  • Bank statements for the last 6 months (mandatory)
  • Compulsory lender feedback covering all bank borrowings
  • No Default Statement for the last 3 months


Generally, Acuité assigns a non-D rating, (but within the sub-investment grade) when it is confirmed that there has been no default in its debt servicing in the last 3 months. For assigning an investment grade rating, generally a curing period of 1 year is observed. However, Acuité may deviate from the above timelines in case of certain situations as outlined in the curing period section of default recognition criteria under extant regulatory guidelines.