Crisil launches outlooks for corporate ratings

Credit rating agency Crisil has introduced 'rating outlooks' on ratings of long term instruments and fixed deposits floated by corporates.

The rating outlook takes into account the needs of active investors like mutual funds, which have a relatively shorter investment time horizon and require to mark to market their holdings on a daily basis.

A rating outlook, whether 'positive', 'stable' or 'negative', indicates the direction in which a rating may move over a medium-term horizon of one-to-two years.

A positive outlook will indicate that a rating may be upgraded, a stable outlook will indicate that the rating is likely to remain unchanged while a negative outlook will indicate that the rating may be lowered.

"We have assigned rating outlooks to the long term instruments and fixed deposits of 170 corporates so far. Almost 85 per cent of the rating outlooks are stable, 10 per cent are positive and five per cent are negative," Roopa Kudva, executive director & chief rating officer, Crisil, said.

The rating agency plans to publish outlooks for all long term instruments and fixed deposits ratings, barring 'C' and 'D' category ratings.

Outlooks will be provided irrespective of residual maturity for these instruments. Long-term structured instruments exposed to the credit risk of single entity will also be assigned outlooks. Ratings on 'Rating Watch' will, however, not carry an outlook.

"Outlooks are intended to provide opinion about the potential direction of the rating movement," said Kudva.