Credit Rating : Fees Structure

FEE STRUCTURE

Initial Rating Fees

0.10% of the outstanding amount of Fixed Deposits subject

(a) Fixed Deposits
to a minimum of Rs. 200,000.

0.10% of the issue amount subject to a minimum of

(b) Debentures
Rs.200,000.

(c) Commercial 0.10% of the issue amount subject to a minimum of

Paper Rs.200,000.

0.05% of all the outstanding debts as on last balance sheet

(d) Issuer Rating
date subject to minimum of Rs.300,000.

• Annual Surveillance Fees on FD/Debentures/CP : 0.03% of the amount outstanding

under the rated instrument subject to a minimum of Rs. 100,000.
• Annual Surveillance Fees on Issuer Rating - 0.05% of the amount outstanding under the
rated instrument subject to a minimum of Rs. 200,000.

• Credit Reports: Fees applicable will depend on the scope and coverage of each report
and can be obtained on specific request
Notes :
 Rating fees are computed separately on each instrument issued.
 Issuers are liable to pay rating fees, regardless of whether they accept CARE's rating or
not. Full rating fee is to be paid upfront.
 Out of pocket expenses, if any will be charged to the client on actual basis. CARE will
not be obliged to disclose details of such expenses. In case of roll-over of CPs, no rating
fee would be charged for any roll-over within one year of the original rating. For any
increase in the amount of issue, additional fee at normal rate will be charged. For any
roll-over after a year from the original rating, additional fee at the rate applicable for
annual surveillance will be levied.
 Service tax will be charged extra as applicable.

 CARE reserves the right to make changes in the fee structure at any time.

Rating Process

The rating process takes about three to four weeks, depending on the complexity of the
assignment and the flow of information from the client. Rating decisions are made by the
Rating Committee.

FREQUENCY OF RATING ACTIONS

• The rating assigned is communicated to the client along with a detailed rationale.
• The ratings accepted by the clients are published and then monitored on a continuous
basis over the life of the instrument.
• CARE has a comprehensive in-house data base which facilitates surveillance of the
various industries and companies operating in these industries.
• Each rating is reviewed formally at least once a year, when analysts meet the issuer's
management.
• A review can also be triggered by a major development in the company or in the
industry, which may have a significant bearing on the credit-worthiness of the
company.
• As a part of the review exercise, actual financial performance is analysed in the light of
the estimates made earlier and deviations are examined.
• CARE puts the rating under Credit Watch, when any event or deviation from the
expected trend has occurred or is expected and additional information is necessary to
take rating action.

• The rating may be retained, upgraded or downgraded based on the changed prospects
for the issuer. A rating change is at the absolute discretion of CARE, without
concurrence of the client.
Credit Rating of Debt instruments
A. Long /Medium -term instruments (NCD/FD/CD/SO/CPS/RPS/L)
Symbols Rating Definition
CARE AAA
Instruments with this rating are considered to be of the best credit quality,
offering highest safety for timely servicing of debt obligations. Such
instruments carry minimal credit risk.
CARE AA
Instruments with this rating are considered to offer high safety for timely
servicing of debt obligations. Such instruments carry very low credit risk.
CARE A
Instruments with this rating are considered to offer adequate safety for
timely servicing of debt obligations. Such instruments carry low credit
risk.
CARE BBB
Instruments with this rating are considered to offer moderate safety for
timely servicing of debt obligations. Such instruments carry moderate
credit risk.
CARE BB
Instruments with this rating are considered to offer inadequate safety for
timely servicing of debt obligations. Such instruments carry high credit
risk.
CARE B
Instruments with this rating are considered to offer low safety for timely
servicing of debt obligations and carry very high credit risk. Such
Instruments are susceptible to default.
CARE C
Instruments with this rating are considered to be having very high
likelihood of default in the payment of interest and principal.
CARE D
Instruments with this rating are of the lowest category. They are either in
default or are likely to be in default soon.
NCD
FD
CD
SO
CPS
RPS
Non Convertible Debenture
Fixed Deposit
Certificate of Deposit
Structured Obligations
Convertible Preference Shares
Redeemable Preference Shares
As instrument characteristics or debt management capability could cover a wide range of
possible attributes whereas rating is expressed only in limited number of symbols, CARE
assigns '+' or '-' signs to be shown after the assigned rating (wherever necessary) to indicate
the relative position within the band covered by the rating symbol.
B. Short term instruments
Symbols Rating Definition
PR1
Instruments with this rating would have strong capacity for timely
payment of short-term debt obligations and carry lowest credit risk.
Within this category, instruments with relatively better credit
characteristics are assigned PR1+ rating.
PR2
Instruments with this rating would have adequate capacity for timely
payment of short-term debt obligations and carry higher credit risk as
compared to instruments rated higher.
PR3
Instruments with this rating would have moderate capacity for timely
repayment of short term debt obligations at the time of rating and carry
higher credit risk as compared to instruments rated higher.
PR4
Instruments with this rating would have inadequate capacity for timely
payment of short-term debt obligations and carry very high credit risk.
Such Instruments are susceptible to default.
PR5 The instrument is in default or is likely to be in default on maturity.
As instrument characteristics or debt management capability could cover a wide range of
possible attributes whereas rating is expressed only in limited number of symbols, CARE assigns
'+' or '-' signs to be shown after the assigned rating (wherever necessary) to indicate the relative
position within the band covered by the rating symbol.
Suffix (L) will be used for loans.
C. Issuer Rating
Symbols Definition
CARE AAA (Is) Issuers with this rating are considered to be of the best credit quality, offering highest
safety of timely servicing of debt obligations. Such issuers carry minimal credit risk.
CARE AA (Is) Issuers with this rating are considered to offer high safety for timely servicing of debt
obligations. Such issuers carry very low credit risk.
CARE A (Is) Issuers with this rating are considered to offer adequate safety for timely
servicing of debt obligations. Such issuers carry low credit risk.
CARE BBB (Is) Issuers with this rating are considered to offer moderate safety for timely
servicing of debt obligations. Such issuers carry moderate credit risk.
CARE BB (Is) Issuers with this rating are considered to offer inadequate safety for timely
servicing of debt obligations. Such issuers carry high credit risk.
CARE B (Is)
Issuers with this rating are considered to offer low safety for timely servicing
of debt obligations and carry very high credit risk. Such issuers are
susceptible to default.
CARE C (Is) Issuers with this rating are considered to be having very high likelihood of
default in the payment of interest and principal
CARE D (Is) Issuers with this rating are of the lowest category. They are either in default or
are likely to be in default soon.
Care’s Issuer Rating (CIR) reflects the overall credit risk of
the issuer. The rating scale has been aligned with the longterm
instruments rating scale ranging from AAA(Is)
signifying ‘Highest Safety’ to D(Is) signifying ‘Default’. ‘Is’
signifies ‘Issuer Rating’

J. CARE IPO grading Scale

CARE IPO grade Evaluation
5 Strong fundamentals
4 Above average fundamentals
3 Average fundamentals
2 Below average fundamentals
1 Poor fundamentals

NSIC – CARE SSI rating symbols

SE 1A Highest Performance capability; High Financial strength. Prospects of performance
are the highest and the entity has high capacity to meet its financial obligations.
SE 1B
Highest Performance capability; Moderate Financial strength. Prospects of
performance are the highest. However, the entity has moderate capacity to meet its
financial obligations.
SE 1C Highest Performance capability; Low Financial strength. Prospects of performance are
the highest. However, the entity has low capacity to meet its financial obligations.
SE 2A High Performance capability; High Financial strength. Prospects of performance are
high and the entity has high capacity to meet its financial obligations.
SE 2B High Performance capability; Moderate Financial strength. Prospects of performance
are high. However, the entity has moderate capacity to meet its financial obligations.
SE 2C High Performance capability; Low Financial strength. Prospects of performance are
high. However, the entity has low capacity to meet its financial obligations
SE 3A Moderate Performance capability; High Financial strength. Prospects of performance
are moderate. However, the entity has high capacity to meet its financial obligations
SE 3B
Moderate Performance capability; Moderate Financial strength. Prospects of
performance are moderate and the entity has moderate capacity to meet its financial
obligations
SE 3C
Moderate Performance capability; Low Financial strength. Prospects of performance
are moderate.
However, the entity has low capacity to meet its financial obligations.
SE 4A Weak Performance capability; High Financial strength. Prospects of performance are
weak. However, the entity has high capacity to meet its financial obligations.
SE 4B Weak Performance capability; Moderate Financial strength. Prospects of performance
are weak. However, the entity has moderate capacity to meet its financial obligations
SE 4C Weak Performance capability; Low Financial strength. Prospects of performance are
weak and the entity has low capacity to meet its financial obligations.
SE 5A Poor Performance capability; High Financial strength. Prospects of performance are
poor. However, the entity has high capacity to meet its financial obligations
SE 5B Poor Performance capability; Moderate Financial strength. Prospects of performance
are poor. However, the entity has moderate capacity to meet its financial obligations
SE 5C Poor Performance capability; Low Financial strength. Prospects of performance are
poor and the entity has low capacity to meet its financial obligations