FAQ

A : Private, state-owned enterprises, sovereign entities or multi-lateral agencies that wish to raise fund in the Thai debt capital market. 

Most institutional investors in the debt markets invest only in rated debt issues, or securities issued by rated issuers.  Lagging a credit rating will seriously restrict a debt issuer’s access to the debt capital market. 

A : TRIS Rating is the leading credit rating agency in Thailand with more than 20 years of credit rating experiences. TRIS Rating has firmly established its reputation as an independent rating agency with high professional standards. 

A : TRIS Rating assigns an issuer rating (sometimes referred to as ‘company rating’) to a company or an organization which represent TRIS Rating’s opinion on the rated entity’s ability and willingness to fully and punctually meet its obligations. TRIS Rating also assigns an issue rating to a specific debt issue. A company wishing to have credit rating on its debt securities, is usually required to have an issuer rating (or company rating) first.

Generally, the rating of an issuer’s senior unsecured bonds will be equal to its issuer rating. However, it is not unusual for an issue rating to be different from the issuer rating. This is due to the different debt structures and claim priorities among debt issues. 

TRIS Rating also rates structured finance transactions and hybrid debt securities.

A : If the company is a public company listed on the stock exchange, then information disclosed in the SEC 56-1 form is the starting point to provide an overview of the company’s business operation, and a preliminary understanding on the key business risks involved. TRIS Rating will require greater details regarding the company’s operation, the key drivers of its business performance, its strategy and competitive position in the industry, future expansion plans, growth prospects, key obstacles in the near and medium term, etc. 

Information on the financial part will include the company’s financial forecast on top of its most recent and historical audited financials, its financing plan for business expansion or potential acquisition, financial leverage and its policy related to capital structure, dividend payments, and leverage tolerance, its financial flexibility including available bank credit facilities, access to debt capital market or other funding sources, and liquidity position, etc.

The information gathering will include interviews with the company’s top management and heads of key business departments if needed.

A : TRIS Rating takes confidentiality very seriously. All of TRIS Ratings’ analysts are bound by confidentiality agreements, and are required to strictly adhere to the code of conduct with regard to non-disclosure of customer information. As part of the procedures to prevent inadvertent disclosure of non-public information, TRIS Ratings sends its draft rating report to its customer for review before releases the report to the public. 

A : Most of the companies rated by TRIS Ratings do not have a rating advisor. TRIS Rating sees most of its rating customers have qualified personals to interact with TRIS Rating and facilitate the rating process. It’s all up to the company to decide whether there is a need to appoint a rating advisor. 

A : The rating process will start upon the execution of a rating service contract. It starts with the analyst sending a list of required information to the company. Once most of the required information has been submitted, it normally takes 6 to 8 weeks for TRIS Rating to complete the rating process.

A : The credit rating committee is consisted of certain analytical members of TRIS Rating’s management team and the analyst. The credit rating committee makes rating decisions after thorough consideration of the relevant information and the rating rationale proposed by the analytical team. . All credit issues are discussed openly in the committee. If there are different views among members of the committee, rating decisions will be made based on majority votes. 

A : A company may appeal the rating committee’s decision within seven working days after being informed of the rating committee’s decision. In that case, the company will be responsible for providing additional information to support a rating reconsideration. The rating committee will then reconvene to consider the matter, and decide whether or not to change the original rating decision. The appeal process applies only to new credit ratings, and a company can appeal only once.

A : If the company agrees with the rating result and wishes to have it released to the public, TRIS Rating will send a credit rating announcement to various news media. The announcement will also be posted on TRIS Rating’s website. 

A : Yes, it can. While in most cases, the primary reason for having a credit rating is to provide an independent credit opinion to prospective investors as one piece of information for their investment considerations, a credit rating -- even for an unpublished one -- is by itself useful information for the rated company. Many companies find the rating process an educational experience that helps them prepare for the eventual launching of a debt issue. For those companies that are not satisfied with the rating results, and hence prefer to keep the rating results private, they will have known what are needed to improve their credit standings.

A : TRIS Rating monitors a rated company not only the company’s business operation and financial performance on an on-going basis, but also following the changes in market condition and new developments in the related industries that may have potential impacts on the ratings. A full credit review is done at least once a year. The result of review can be an upgrade, a downgrade or an affirmation of the existing rating.

At any time during the monitoring period, should there be events that in TRIS Rating’s view, could potentially impact a rating, TRIS Rating may alert the public by issuing either one of the following types of announcements:

1. A CreditAlert is a public warning about the occurring of an event – could be something related to the company’s operating environment or connected directly to the company -- that could affect the rating. A CreditAlert means that TRIS Rating is in the process of assessing the event. A CreditAlert is designated as either “positive”, “negative” or “developing” depending on the circumstances. The existing rating continues in force unless there is any change upon a full assessment by TRIS Rating.

2. A CreditUpdate is a review of an existing rating. It is released after TRIS Rating has assessed the impact of a significant event, based on supplementary information which may or may not change TRIS Rating’s opinion on a particular credit. A CreditUpdate announces the result of TRIS Rating’s credit review whether the rating has been “upgraded”, “downgraded”, “affirmed” or “canceled”.

A : A rating is not a recommendation to buy, sell or hold a particular security. It is a judgment or opinion of a credit rating agency regarding the creditworthiness of a company, with respect to a particular debt instrument, based on relevant risk factors. The decision to invest should be made based on an investor’s individual judgment and requirements. Since investors’ risk tolerances vary, one investor might never consider an issue rated below “A”, while another might eagerly purchase an issue rated “BB+” accepting the higher risks for the opportunity to earn higher returns. Large institutions may have fiduciary guidelines and requirements imposed either by their boards or by regulators that prohibit them from investing in non-rated issues or issues below predetermined levels.

Investors also have other concerns besides credit quality, such as coupon rates, maturity, yield, tax considerations, and other non-credit factors.

A : 1. TRIS Corporation Limited (TRIS) 51%          2. S&P Global Asian Holdings Pte. Ltd. 49%

*As of May 2017

A : TRIS Rating’s organizational and operational structures are designed to create an environment of neutrality and independence. Below are some perspectives on such an environment:

The shareholding structure of our parent company, TRIS, is diverse, comprising governmental related entities, and domestic and international institutions (banks, financial and securities institutions, asset management companies, insurance companies and international credit rating agency).

The board of directors is a policy board and sets the overall strategies. The board and its members have no involvement in the rating process.

Furthermore, it should be noted that, the commercial team has no part in the rating committee. The analytical team works independently from the commercial team, who takes care of commercial matters.

TRIS Rating enforces a strict code of ethics among all staff members, requiring them to strictly adhere to the company rules and code of conducts and to perform all functions in a transparent manner.

A : TRIS Rating assigns ratings based on a national rating scale, whereby a company’s creditworthiness is a rank order of creditworthiness relative to entities in the Kingdom of Thailand. TRIS Rating assigns “AAA” to companies, which in TRIS Rating’s opinion, have the highest level of creditworthiness. TRIS Rating also assigns its national scale rating to non-domestic entities participating in the Thai financial market. While international scale ratings assigned by international credit rating agencies compare credit risk of entities globally. Therefore, the ratings assigned by TRIS Rating, though having the same symbols, are not directly comparable with ratings assigned by international credit rating agencies.

A : TRIS Rating has more than 20 years of credit rating experience. During the first few years when the rating operation was newly set up, Standard & Poor’s provided technical assistance in developing credit rating methodologies.  TRIS Rating has continuously refined its methodologies to suit the credit characteristics of local environment.

As a co-founder of the Association of Credit Rating Agencies in Asia (ACRAA), a regional organization aiming to develop and promote credit rating skills, TRIS Rating has had opportunities to exchange knowledge on rating methodologies with other leading rating agencies in Asia, which has helped broaden its knowledge on rating methodologies and international rating practices.

TRIS Rating’s partnership with S&P Global Rating, as signified by the acquisition by S&P Global Asian Holdings Pte. Ltd. of a 49% equity stake in TRIS Rating in June 2016, will help strengthen its rating capability and broaden the range of services to better serve the Thai debt capital market.