InvestorQ : Will the payment delays by companies made during the lockdown period lead to rating downgrades? Which are the sectors that could get impacted?
Niti Shenoi made post

Will the payment delays by companies made during the lockdown period lead to rating downgrades? Which are the sectors that could get impacted?

image
Archita Jajjoo answered.
7 months ago
Follow

SEBI has asked the credit rating agencies (CRAs) not to classify a company as a defaulter if it misses payments of interest or principal owing to the nationwide 21-day lockdown. However, no instruction to that effect has gone out and it does only refer to the 21 day lock in period and not beyond that. It may be recollected that to continue servicing their debt even if businesses are disrupted due to the lockdown, RBI made provisions for deferment of repayments of loans in its monetary policy announced last week. These are still at the discretion of the bank and if the CRA has the discretion to downgrade or otherwise. The SEBI statement in this regard is subject to the bank agreeing to reschedule.

5 Views