The rating process usually begins when an issuer/entity contacts LRA’s Business Development and Marketing (BD&M) Department with a request to engage LRA to provide a rating. Following the request, a mandate letter is sent to the client within 5-10 working days of the request.
Upon signing, the mandate letter becomes a contractual agreement between the entity/issuer to be rated and LRA to undertake a rating assignment.
RATING ASSIGNMENT ALLOCATION
Upon signing the mandate LRA will assign an approved analyst team to coordinate with the entity to obtain the information required and proceed with the rating.
PRELIMINARY ANALYSIS & INFORMATION SOLICITATION
A Preliminary study is conducted with a careful review of an entity’s published information and analyst team will shares a detailed questionnaire with the Entity/issuer after discussing the information requirements with the rating team. Once information is collected and completeness is ensured detailed research and rating process will usually the rating process will take 6-8 weeks.
LRA conducts a detailed discussion with the entity/issuer’s management team to understand the business. The objective of which is to develop a better understanding of the organizational structure and quality of the process, and conduct the interview of key department heads and establish a sense of control environment prevailing in the entity. A detailed itinerary in advance is sent for the said visit. This can be done through face-to-face meetings, site visit and video/teleconference, Zoom ,etc as considered appropriate
IN DEPTH ANALYSIS
The rating team performs a detailed analysis in line with the sector-specific rating criteria and methodologies. The analysis includes
- Assess the Key rating Drivers according to applicable sector criteria
- Apply rating model
- Quantitative and qualitative analysis performed in line with criteria
- The qualitative analysis includes the assessment of the Ownership, Governance, Management and Systems of the entity/issuer.
- Entity/Issues placement within the relative rating universe after in-depth Sector Analysis
- Develop sector study, where the sector is new
The in-depth analysis prepares the Unit Head and apex rating committee members for the next step i.e. the management meeting
During such study if the rating team is of the view additional information is required, the rating team will request such additional information from the client.