Rating Practices


PACRA undertakes that all information, which entity does not desire to publicize, will be kept confidential and will be used only in the rating process and internal analysis. PACRA would forward the rating report to entity to ensure that no confidential information is contained therein/ or for comment in factual content before publication. We expect to receive the feedback within five working days. PACRA does not disclose confidential information obtained during the rating exercise to anyone under any circumstances. Beyond ethical considerations, there is a contractual written commitment by PACRA to each of its clients.


PACRA conducts surveillance in two forms i.e., ongoing surveillance and formal annual update. Once rating is accepted, the surveillance period starts immediately. Under surveillance, PACRA monitors the assigned rating on a continuous basis, wherein usually it is done on quarterly basis and in exceptional circumstances it may be done with higher frequency. PACRA performs at least one formal update during each 12-month period starting from initial notification. It is followed by a rating notification even if it remains unchanged. The annual update/surveillance process benefits from the established relationship developed in delivering the initial rating. It broadly follows the parameters established for initial rating assignment. Formal management meetings are held once a year. During surveillance, PACRA is duty-bound to inform the public of any change in the rating opinion. PACRA normally advises entity of any proposed rating action but reserves the right to take such action without prior notice if so warranted by circumstances.
PACRA keeps in close touch with the entity to remain abreast of interim figures and any internal or external developments that may affect PACRA’s rating opinion. In on-going surveillance review, PACRA's analyst conducts monthly and quarterly surveillance of the rated entity. For this purpose, quarterly published / unpublished financial accounts are to be furnished for tracking the performance and detailed analysis. Surveillance usually is carried out through phone calls and emails made to the entity by the relevant analyst. The phone calls, though conversational and casual, follow the highest standards of cordiality, etiquette, protocol, and professionalism. The frequency of the calls / emails is monthly or quarterly. In addition, PACRA regularly monitors a broad range of economic factors and trends that may impact on credit risk. When an event or deviation from an expected trend has occurred or is expected, additional information is solicited to keep the rating opinion relevant.

Public Dissemination

In an initial rating assignment, the entity's management has the prerogative to make this rating public or keep it confidential. The management is expected to take this decision within five days of notification. In case, the entity decides to go for public dissemination. PACRA does so through its website and other electronic media. It provides all the benefits of a publicly available independent rating opinion of the entity. In case the rating is not made public, any selective disclosure would not be allowed.
Once an initial rating of an entity is done and publicly disseminated, thereafter, as long as the rating mandate with PACRA remains outstanding, PACRA is duty-bound to inform the public of any change in the rating opinion and reserves the right to take such action without prior notice if so warranted by circumstances. PACRA attempts to achieve public dissemination of any updating opinion within two days of its notification.
In case of public rating, PACRA, in addition to respective press release, disseminates the summary report through its website. However, the detailed report is made available against a nominal fee.

Policy on Withdrawal / Termination

The validity of the rating mandate is in perpetuity until entity decides to terminate the rating relationship after giving at least one-month advance notice. During the currency of the rating mandate, PACRA's rating remains valid unless modified or withdrawn at PACRA's sole discretion and through a formal notification. However, in case of a confidential rating, such notice period is not required. Meanwhile, instrument ratings are normally withdrawn only when the rated instrument is redeemed. If entity does not cooperate with PACRA to enable it to comply with its obligations, PACRA shall suspend the rating/withdraw from the engagement. Incase of publicly disseminated rating, PACRA shall promptly notify this fact to the Securities & Exchange Commission of Pakistan and the public.

Rating Review Appeal Policy

In case entity has disagreement with any of PACRA rating opinion – initial or surveillance – it has the option to appeal for review of rating opinion. The appeal process is covered by PACRA’s publicly available “Rating Review Appeal Policy”. Any disagreement with rating opinion does not restrict PACRA’s right to disseminate its updated opinion on public rating.

Conflict of Interest – Separation of Rating Team From Business Development

PACRA has an explicit policy regarding exclusion of rating analysts from business development activities. Business Management, an independent department has been established; taking care of all new business origination and business relationships with rated entities including fee negotiations.