Rating Policy

1.1 Meaning of WASO Rating The WASO rating indicates the overall financial ability and willingness to service the debts and gauge the exposure to financial distress. WASO does not calculate the Expected Loss (EL), but instead the Probability of Default (PD). Currently, WASO ratings are in local currency and therefore, it does not take into consideration the sovereign risks and foreign currency risk of the national government. Waso considers the national government as the highest paymaster and all government securities are considered as AAA.
1.2 Rating Request Upon request of the issuer and subsequent MOU between Issuer and WASO, rating analysts start the assignment. This signifies that the issuer accepts the terms and conditions laid down by WASO in terms of co-operating with the analysts for providing the necessary information for carrying out the assignment. The mandate letter will also contain information regarding fees, the nature of information required from the issuer, terms related to appeal, withdrawal, suspension, etc…
1.3 Rating Declaration After completion of the draft report, it will be forwarded to the Issuer for their comments regarding the facts and figures containing the report. Draft report does not contain any rating decision or proposal keeping the independence of the Rating Committee in rating decision. A formal discussion meeting is required to conduct on the draft report and after finalization of the draft through consent of the issuer; report is processed for Rating Committee. After due acceptance from the Internal Review Committee, Rating Committee award the rating which is shortly released to the issuer.
1.4 Review Appeal Process Once WASO declared the rating, issuer may appeal to the Rating Committee within three days of the declaration with proper justification in accordance with the “WASO Rating Appeal Policy”. The Rating Committee reserves the right to reconsider the request only when it considers necessary and may revise the rating through press lease in its official website. On the contrary, if the grounds are not sufficient, WASO may go ahead and retain the rating on the original basis. According to the WASO Appeal policy, review appeal must not be more than once.
1.5 Ratings Surveillance WASO maintains ongoing surveillance of all its ratings as according to the SEC guideline, where WASO will keep the issuer under surveillance for the next three years after the initial rating and to the tenure of the Debt instrument i.e. for issue rating. Generally a rating is fully reviewed and a meeting conducted with senior management of the issuer on an annual basis. Unless the rating is based on public information, WASO expects the co-operation of the issuer in keeping WASO informed of any significant developments, providing WASO with continuing financial information as released, and responding to questions that arise.
1.6 Ratings withdrawal & Suspension The decision of whether to maintain surveillance of an issuer/Issue or not, only, if the available information is considered adequate by WASO. If the decision is made to discontinue surveillance, the ratings are generally changed to ‘Suspension’ soon after the decision taken by the Rating Committee. Rating Committee may change a rating prior to withdrawal, if it views the public rating as misleading based on current information. The changed rating would be publicly released and then the changed rating would be withdrawn. Whenever an issuer enters bankruptcy proceedings, WASO assigns rating of “Not Appropriate” for the issuer. In case of a need for WASO to maintain surveillance due to issuer emerges from default through a process of reorganization, then the issuer will be reassessed / assessed before assigning a fresh rating.
1.7 Ratings Release WASO strives to issue all press releases in a timely manner, placing a high priority on informing the public of its rating opinions in respect of the public ratings maintained by WASO, as soon as possible, following the rendering of the decision by the Rating Committee.
1.8 Confidentiality of Issuer information WASO maintains in confidence all non-public information communicated to them by any issuer, or its agents, under the terms of a confidentiality agreement or otherwise under a mutual understanding that the information is shared confidentially. WASO has adopted procedures and mechanisms to protect the non-public nature of information shared with them by issuers under the terms of a confidentiality agreement or otherwise under a mutual understanding that the information is shared confidentially. WASO use non-public information only for purposes related to their rating activities or otherwise in accordance with their confidentiality agreements with the issuer.
1.9 Recognition of Default WASO considers a borrower to be in default under the following conditions: 1) A missed or delayed payment of interest and/or principal, including delayed payments made within a grace period. No exceptions are made in default recognition and the treatment provided is uniform across all issuer segments. 2) All types of rescheduling or restructuring of any facility under default recognition if the above is done to avoid default recognition 3) Bankruptcy, administration, receivership or other legal blocks (Perhaps by regulation) to the timely payment of interest and/or principal. 4) A distressed exchange where (angel) the issuer offers bondholders a new security or package of securities that amounts to a diminished financial obligation, or (beer) the exchange had the apparent purpose of helping the borrower avoid default.