CRISIL Rating has adopted the conventional rating system prevailing in the advanced centuries. The main symbols used in credit rating of debt securities and their meanings are given below:For preference shares, the letters “Pp” are prefixed to the debenture rating symbols. The fixed deposit rating symbols commence with “F” and the short-term instruments use the letter “P” from the concept of ‘prime’.
Rating Symbols used for Debentures
AAA (Triple A) Highest Safety
Debentures rated ‘AAA’ are judged to offer the highest safety of timely payment of interest and principal through the circumstance providing this degree of safety are likely to change, such changes can be envisaged are most unlikely to affect adversely the fundamentally strong position of such issues.
AA (Double A) High Safety:
Debenture rated ‘AA’ are judged to offer high safety of timely payment of interest and principal they differ in safety from ‘AAA’ issue only marginally.
A – Adequate Safety
Debentures rated A are judged to offer adequate safety of timely payment of interest and principal; however, change in circumstances can adversely affect such issues more than those in higher-rated categories.
BBB (Triple B) – Moderate Safety
Debentures rated ‘BBB’ are judged to offer sufficient safety of timely payment of interest and principal for the present, however, changing circumstances are more likely to lead to weaken capacity to pay interest and repay principal than for debentures in higher rated categories.
BB (Double B) – Inadequate Safety
Debentures rated ‘BB’ are judged to carry inadequate safety of timely payment of interest and principal. While they are less susceptible to default than other speculative-grade debentures in the immediate future, the uncertainties that the issuer faces could lead to inadequate capacity to make timely interest and principal payments.
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B – High Risk
Debentures rated ‘B’ are judged to have greater susceptibility to default; while currently interest and principal payment adverse business and economic conditions would lead to the lack of ability or willingness to pay interest or principal.
C – Substantial Risk
Debentures rated ‘C’ are judged to have factors present that make them vulnerable to default. Timely payment of interest and principal is possible only if favourable circumstances continue.
D – In Default
Debentures rated ‘D’ are in default and in arrears of interest or payments or are expected to default on maturity.
Such debentures are extremely speculative and returns from these debentures may be realised only a reorganisation or liquidation.
Note:
1. CRISIL Rating may apply + (plus) or – (minus) signs for ratings from AA to D to reflect comparative standing with the category.
2. The contents within parenthesis are a guide to the pronunciation of the rating symbols.
3. Preference share rating symbols are identical to debenture rating symbols except the letters Pp are prefixed to the debenture rating symbols, e.g. Pp AAA.
Rating Symbols used for Fixed Deposits
FAAA – Very strong degree of safety
FAA – Strong degree of safety
FA – Satisfactory safety
FB – Inadequate safety
FC – Safety in doubtful
FD – Issue in default or likely to be in default
Rating Symbols used for short-term instruments
P1 – Very strong degree of safety
P2 – Strong degree of safety
P3 – Adequate degree of safety
P4 – Minimal degree of safety
P5 – In default or likely to be in default
CRISIL Rating may apply + (plus) or – (minus) for its rating symbols to indicate the relative position within the rating category.
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