1. What is the basis of the obligation to have a credit rating as determined by the Resolutions of BRSA?
BRSA Resolution dated 21.02.2020 and numbered 8876 and BRSA Resolution dated 10.09.2020 and numbered 9133 imposed the obligation that companies other than banks and financial institutions, whose total risk in the banking sector is TRY 500 million and above including the requested credit according to the latest information at the Risk Center of the Banks Association of Turkey, must have a rating from a rating agency, authorized by the Agency, and to submit it to the banks they work with, until 30.06.2021 in order to use credit.
With the purpose of preventing the hindering of the credit allocation processes and extending the rating service costs to be borne by the related companies over a period of time considering the pandemic conditions, the current period of time, and the capacity of resources; BRSA Resolution dated 27.05.2021 and numbered 9590 enabled that credit allocation may be continued until 31.12.2021 by obtaining a document evidencing the conclusion of an agreement, even if the rating report has not been issued yet, provided that the companies bound by the rating obligation conclude an agreement with an authorized rating agency until 31.08.2021 for the credit allocation and that the rating report to be issued for the rating requests made within the period in question is completed until 31.12.2021.
With the purpose of preventing the hindering of the credit allocation processes and extending the rating service costs to be borne by the related companies over a period of time considering the pandemic conditions, the current period of time, and the capacity of resources; BRSA Resolution dated 16.09.2021 and numbered 9789 resolved, related to the rating obligation, to extend the period of the obligation for the companies bound by the rating obligation, of starting the rating process with an authorized rating agency through the conclusion of an agreement in order to use credit, until 31.12.2021, but for the credit applications of the companies to be bound by the rating obligation after this date, it resolved to impose the obligation that a company applying for the credit use approval must obtain a certification issued by an authorized rating agency stating that the rating process has been started, and must submit that certification to the bank that it applies to.
With the letter dated 03.01.2022 and numbered E-42233676-010.03-37524 as attached to the agenda letter of the Agency’s Presidency dated 05.01.2022, it was resolved to impose the obligation for the companies bound by the obligation of having a rating, regardless of the date when they have been bound by this obligation, of submitting, during credit applications, the bank of application a valid rating obtained from an authorized rating agency for the credit use approval or a certification issued by an authorized rating agency stating that the process has been started; and to announce this resolution to the associations of the Agency and to publish it on the website of the Agency.
2. Which points are taken into consideration when determining whether the total risk of the customer at the Risk Center is TRY 500 million and above?
Debts due to institutions other than banks are excluded.
Credits used for credit collateral from other banks or financial institutions are excluded.
When determining whether the total risk of the customer at the Risk Center is TRY 500 million and above, it is required to take the latest balance on the date of allocation as a basis for the total risk balance, and to also take into account the new credits requested.
3. Are non-cash loans also taken into consideration when determining whether the total risk of the customer at the Risk Center is TRY 500 million and above?
Yes, they are also taken into consideration. Companies that have only non-cash risk of TRY 500 million and above or whose total cash and non-cash credit risk is TRY 500 million and above are obliged to have a rating (for example: if the company has a cash risk of TRY 200 million plus a non-cash risk of TRY 300 million, then it must have a rating).
4. Are public enterprises and local administrations (municipalities) obliged to have a rating?
No, since they do not have a company status, they are exempt from the obligation of having a rating, but their affiliates having a company status must have a rating.
5. For the risks of TRY 500 million and above, should the consolidated risks of the group or the risks of the company belonging to the group be taken into consideration?
Each company having a credit risk of TRY 500 million and above must have an individual rating. (For example: The companies B and C, consolidated under the roof of Holding A, have an individual credit risk of TRY 500 million and above. However, if Holding A does not have cash or non-cash bank risk or if its own credit risk is below TRY 500 million, then the companies B and C will have an individual rating, but Holding A will be exempt from this.)
In other words, the credit amount of TRY 500 million and above in BRSA regulation must be taken into consideration severally and specifically for each company. If the individual risk of each legal entity within the group is TRY 500 million and above, then an individual credit rating report must be obtained for each company.
6. How can I get information about the rating process?
You can supply all processes of JCR Avrasya Derecelendirme A.Ş. (JCR Avrasya) within the “JCR Avrasya Process” document.
For detailed information, you can contact us at the following contact details.
email@example.com and/or Tel: 0(212) 352 56 73 - 74
7. How is pricing determined during the rating process?
Pricing is determined by taking into account the asset size, turnover figures, current cash + non-cash bank risk details, as well as the parameters related to the sector where you carry out business.
8. What is “Issue Rating”? Is any additional fee charged for this service?
“Issue Rating” can be given if requested among the ratings given in the credit rating report. Companies may separately request this rating in case of bond and bill issues. No additional fee is charged if not requested. In case the company requests an issue rating, the respective fields on the agreement must be marked.
In case the company requests an issue rating, then an issue commission fee of 3.5 ‱ (three and a half ten thousandth) of the total issue amount will be paid separately. These amounts (Issuance Commission Fees) are excluded from the Annual Credit Rating Fee and apply to each issue separately.
9. Are ratings shared with the public?
The sharing of the ratings and the related updates with the public is subject to the request of the service requesting customer, in case this customer is not a capital market agency under the Capital Market Law, is not an enterprise whose capital market instruments are traded at the stock exchange, and is not indebted to capital markets on the date of the rating report. However, in case the customer becomes a capital market agency or is indebted to capital markets within the term of the agreement, the ratings and the related updates are shared with the public.
The ratings and the related updates of the banks are announced to the public in any circumstances.
Regardless of the request of the customer, the ratings given by the rating agency are regularly reported to the competent authorities (CMB, BRSA, Risk Center of BAT, etc.).
10. What is the scope of the professional liability insurance?
Pursuant to Article 63 of the Capital Market Law numbered 6362, rating agencies are liable for the damages they cause due to the incorrect, misleading and missing information in the reports they issue as a result of their activities.
Article 27 of the Communiqué regulates the liability principle in terms of rating agencies. Without prejudice to the general provisions, rating agencies, as well as rating surveyors and rating committee members, are severally liable for the damages that may be suffered by customers and third parties due to failure to perform the rating activity as per the principles and procedures stated in the said Communiqué. The relevant principles of the activity are listed in Article 15 of the Communiqué, and the liability principle is brought to the agenda only in case of a breach of them.
The second paragraph of Article 27 of the Communiqué obligates rating agencies to take out a professional liability insurance policy to cover the damages that may arise from the rating activity to be performed by them. The same obligation is regulated in Article 13/1-d of the Regulation on the Principles Related to the Authorization and Activities of Rating Agencies.
In addition, the article Miscellaneous of the credit rating agreement signed with us provides for as follows: “The Rating Agency may not be held liable for the Service Requesting Customer’s facing with damaging results and being negatively affected due to the rating activity and the ratings to be given, provided that the rating activity has been performed and carried out in accordance with the legal regulations. In any case, the liability of the Rating Agency arising from the damages to be caused to the Service Requesting Customer due to its fault under this Agreement shall be limited to the scope determined by the professional liability insurance, and the Rating Agency shall not be liable under any circumstances for damages that may arise from loss of profit, loss of data or loss of reputation, etc., or indirect, incidental or penal damages, or other losses and damages caused to 3rd parties.”
Likewise, Article 30 of the Regulation on the Principles Related to the Authorization and Activities of Rating Agencies of BRSA, as published in the Official Gazette dated 17.04.2021 and numbered 28267, provides for as follows:
“(1) Rating agencies shall take out a professional liability insurance policy to guarantee the compensation of the damages that may arise from the ratings to be given as a result of the rating activities that are not included in the scope of the third paragraph of Article 21 and that are carried out under the projected rating applications, provided that the insurance cover is not less than two times the amount projected in the rating agreement signed with the customer.”
Any expenses related to the professional liability insurance are borne by JCR Avrasya.
11. What is the validity period of the rating?
The rating reports to be provided to the service requesting customer are valid for one year as of their date of publication. The rating activity is carried out by reviewing the reports within their validity period, when necessary.
12. What are the term and the termination conditions of the rating agreement?
The term of the agreement is 1 year as of the signing date, unless otherwise stated. Unless any of the parties makes a written notice of termination within 30 days before the expiration of this term, the rating agreement is deemed to have been automatically renewed for one year.
13. How are the given ratings determined?
Ratings are determined within the scope of the criteria stated under the “Company’s Credit Rating Methodology” heading on our website.
14. Credit Rating Notation:
You can access it through the following link:
You can access the notation comparisons with other rating agencies through the following link:
15. What are the services provided by JCR Avrasya Derecelendirme A.Ş.?
• Credit Rating
• Corporate Governance Rating
• Structured Financing
• Issue Rating
• Country Rating
16. What are the ratings included in the credit rating report, and what is their scope?
The credit rating report covers all the ratings below, and the explanations of each rating are stated below.
International Foreign Currency Rating: The companies' ability to meet their foreign currency obligations by producing foreign currency is assessed. All country risks, including convertibility and transfer risk, are taken into consideration.
International Local Currency Rating: The companies' ability to meet their obligations in local currency, regardless of currency, is assessed according to the international criteria. All country risks, except for convertibility and transfer risk, are taken into consideration.
National Local Currency Rating: The companies' ability to meet their obligations in local currency, regardless of currency, is assessed according to the national criteria. Country risks aren't taken into consideration.
Note: The explanations above are for information purposes only, and directions of the bank(s) worked with should be primarily taken into consideration for the request period and scope of the rating report.