CRISIL announces new credit rating system for infra projects
Shital Jibhe / 13 Jan 2017
Rating agency CRISIL announced a new credit rating framework for infrastructure projects. The rating system would facilitate greater participation from long-term investors and lenders.
Rating agency CRISIL announced a new credit rating framework for infrastructure projects. The rating system would facilitate greater participation from long-term investors and lenders.
CRISIL has developed the credit rating framework for infrastructure projects in consultation with the Ministry of Finance and other stakeholders. The credit rating system uses the “expected loss” (EL) methodology and aims to provide an expert judgement on EL over the life of the debt instrument. For this, it will consider the two main aspects of credit risk, viz. the probability of default and the prospects of recovery.
There is a need for rating of innovative instruments such as infrastructure debt funds and credit enhancement mechanisms such as partial guarantees. The long term investors such as insurers and pension funds can then pitch in and bridge the funding gap.
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