Credit rating is a symbolic indicator of a credit rating agency's opinion on the rated entity with reference to its ability and willingness to repay the debt as per terms of the arrangement.

TASSNIEF's credit ratings provide an investor with information to enable him/her to take an informed investment decision based on his risk-return preferences. These also help investors to select the appropriate investment opportunities from a large range of options available

TASSNIEF's ratings are based on an in-depth study of the industry as also an evaluation of the strengths and weaknesses of the entity. The inherent protective factors, marketing strategies, competitive edge, level of technological development, operational efficiency, competence and effectiveness of management, hedging of risks, cash flow, trends and potential, liquidity, financial flexibility, government policies, past record of debt servicing, sensitivity to possible changes in business/economic circumstances are looked into.

Once the entity has accepted a rating, TASSNIEF will continuously monitor the issuer and issuance till the instruments mature or and the rating is being withdrawn. The process is known as surveillance. During the surveillance period, all changes affecting the entity are taken into account and the rating, if necessary, is changed, upwards or downwards. In other words, a rating is valid during the life of the instrument unless it is withdrawn.

TASSNIEF maintains absolute independence from market participants to provide unbiased opinions. The ratings are a result of collective judgment of rating committee members and are based on the application of transparent rating methodologies. TASSNIEF's research and database ensure that opinions are supported by objective benchmarks and peer comparison.

• 1. Credit ratings are not recommendations to buy or sell or hold a specified rated security nor are they offered as guarantees or protections against default. There are opinions only.
• 2. Specific credit rating opinions are not intended to measure many of the other factors that fixed -income investors must consider in relation to risk - such as liquidity risk, pre-payment risk, interest rate risk, risk of secondary market loss, or exchange loss risk.
• 3. The rating which is specific an instrument gives our view on this specific security and is not the rating of the issuer.

Investors
Credit rating is an information regarding the relative ranking of the default loss probability for a given fixed income investment in comparison with other rated instruments. The rating provides the investors with an independent and professional judgment of the credit quality of the instrument, which the individual investor would not otherwise be able to evaluate. Large institutional and other investors also make use of these ratings to make investment decisions.

Issuers
The issuers of rated securities are expected to have an access to a wider investor base. This stems from the fact that more and more investors are using rating as a tool for decision-making and there is faith placed by the market on opinions of rating agencies. Credit rating provides a basis for determining the returns compared to the risks involved or perceived. This could be a useful benchmark for issue pricing and result in savings in costs.

Intermediaries
Intermediaries like investment and merchant bankers and other market players use the rating for pricing, in placement and marketing the issues. The ratings are also used in case of asset securitization and structured obligation. The rating makes the exposure levels and risk undertaking decisions easy.

Regulators
In many countries in the world, the regulators have set certain benchmarks and rules for various market intermediaries or financial institutions, etc. based on the rating for investment, exposure and dealings.