What does Credit Rating actually mean?

Credit RatingRatings are the opinion of rating agencies on the creditworthiness of issuers or issues in terms of their/ its ability and willingness of discharging its obligations in timely manner. Ratings are issued on the basis of information supplied to CRISL by the issuer or its officials and also on the basis of information CRISL believes to be reliable.

Rating does not constitute any advice for investment nor is it a recommendation to purchase, hold or sell a particular security. CRISL ratings opinions are not construed as comment on the suitability of investment for a particular investor. CRISL ratings are not investment recommendations and CRISL does not provide any investment advisory services.

CRISL is not obligated to perform any due diligence on independent verification of any information submitted to it or obtained in the process of rating or surveillance. CRISL does not perform an audit and also does not undertake any responsibility of the verification of the audited statements. The assignment of rating to an issuer or an issue by CRISL should not be viewed as guarantee of the accuracy, completeness and timeliness.

CRISL expresses its opinions in terms of some alphabets such as AAA, AA, B, C etc which in short indicates the investment grade, speculative grade, risk grade or default grade etc. The definition of CRISL ratings are available in the rating scales

CRISL investment grades ratings cover AAA down to BBB, while Speculative grades covers BB down to B. Its Risky Grades fall under the range from CCC to C while D is considered as the Default Grade.

CRISL offers Long Term and Short Term ratings to indicate the time horizon of ratings. Its long term Rating covers a period of one year while its short term rating covers a period up to six months.

CRISL ratings are in local currency and therefore, it does not take into consideration the sovereign risks and foreign currency risk of Bangladesh Government. CRISL, being a domestic rating agency of Bangladesh considers the government of Bangladesh as the highest pay master and all government guaranteed securities/ guarantees are considered as AAA.