Credit Rating for Debt Instruments

A debt instrument means an instrument/security that acknowledges indebtedness and includes debentures bonds and other securities of a company whether constituting a charge on the assets or not. For issues-both public and rights. If a debt instrument including convertibles, the following conditions should also be satisfied on the date of filing the draft offer document with the SEBI and also on the date of filing the final offer document with the ROCSI designated stock exchange. Credit rolling of a minimum investment grade from at least two SEBI register credit rating agencies should be disclosed in the offer document. The issuer company should not be in the list 01 will full defaulters of the RBI. It should almost be in default of payment of interest/repayment of principal in respect of debentures issued to public for more than six months.

Where credit ratings are obtained from more than 2 credit rating agencies, all the rating(s) including the unaccepted ones should be disclosed. All credit ratings obtained during the 3 years preceding the public/rights issue for any listed security of the issuing company should also be disclosed in the offer document.

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