Credit Ratings supported by Credit Enhancement (CE)

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..... /MIRSD/DOS3/CIR/P/2019/70 dated June 13, 2019 had inter alia mandated various measures in reference to credit ratings of securities having explicit credit enhancement feature. In view of recent developments and deliberations with various stakeholders, to provide for enhanced transparency and improved rating process for CE-ratings, SEBI s measures for CE-ratings are being reviewed. II. Applica .....

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..... ote of the issuer/ originator, will carry the CE suffix. A list of such support considerations for CE-suffix is specified at Annexure A. IV. In order to strengthen the rating process as well as to promote transparency, the following measures are being mandated for credit ratings pertaining to Para II(A) above, wherein any of the support considerations specified at Annexure A ( specified s .....

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..... of all the covenants of the security. B. It is reiterated that while assigning such credit ratings, CRAs shall conduct independent due diligence on the nature of specified support consideration and form a definitive internal view / opinion, and, wherever warranted, obtain an independent external legal opinion for ascertaining the strength of the credit enhancement. C. Furthermore, for such .....

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..... 22 of the SEBI (Credit Rating Agencies) Regulations, 1999 and Circular SEBI/ MIRSD/CRA/Cir-01/ 2010 dated January 06, 2010 issued thereunder. VI. This circular is issued with the approval of competent authority, in exercise of the powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 20 of SEBI (Credit Rating Ag .....

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..... structures 5. Standby Letter of Credit (SBLC) backed securities 6. Debt backed by pledge of shares or other assets 7. Guaranteed Pooled bond issuance (PBI), not through a trust 8. Obligor/Co-obligor structures or Cross-default guarantee structures 9. Debt backed by Payment Waterfall /Escrow, or DSRA etc., but with Full Guarantee or DSRA Replenishment Guarantee from a third party .....

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