SEBI/HO/DDHS/DDHS -PoD -3/P/CIR/2024/160 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/DDHS/DDHS -PoD -3/P/CIR/2024/160 To, All Registered Credit Rating Agencies, All Registered Debenture Trustees, Issuers who have listed and/or proposed to be listed Non-Convertible Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt Securities or Commercial Paper Recognized Stock Exchanges, All Depositories registered with SEBI Madam/ Sir, Sub: Amendment to Para 15 of Master Circular for Credit Rating Agencies (CRAs) dated May 16, 2024 ("Master Circular") As per Annexure 11 of the Master Circular, definition of default for debentures/ bonds is specified as "A delay of 1 day even of 1 rupee (of principal or interest) from the scheduled repayment date". No exemption is provided from the above, except in case of rescheduling of the debt instrument by the lenders prior to the due date of payment. Therefore, any other instance of a one-day delay in payment or one-rupee shortfall in payment shall be recognized by the CRA as default. Such requirement is reiterated and remains unchanged from since the notification of the SEBI (Credit Rating Agencies) Regulations, 1999 . In the wake of COVID -19 pandemic, with a view to providing some flexibility to CRAs in taking appropriate view in cases of defaults corrected by the rated entity within a relatively shorter span of time, the following provision on post-default curing period was introduced vide SEBI Circular November 18, 2024 SEBI/HO/MIRSD/CRADT/CIR/P/2020/87 dated May 21, 2020, which is contained in Para 15 of the Master Circular: "15.1 After a default is cured and the payments regularized, a CRA shall generally upgrade the rating from default to non-investment grade after a period of 90 days based on the satisfactory performance by the company during this period. CRAs may deviate from th