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SEO Approval on Debt Securities Rating

The SEO Board of Directors has recently issued the latest approval regarding ratings for debt securities. Based on this approval, issuing debt securities with rating BBB and above, without a guarantor, shall be done only by the listed issuers of the Tehran Stock Exchange (TSE) or Iran Fara Bourse (IFB).

The SEO Board of Directors has recently issued the latest approval regarding ratings for debt securities. Based on this approval, issuing debt securities with rating BBB and above, without a guarantor, shall be done only by the listed issuers of the Tehran Stock Exchange (TSE) or Iran Fara Bourse (IFB). Issuers shall consider the following points:
- The value of the no-guarantor debt securities shall be maximum 60 percent of the average profit of the last two years, based on the audited annual financial statements of the parent or consolidated company; whichever the lower. This amount for “Ijara certificates” or “lease back Ijara certificates” can increase to 80 and 100 percent respectively.
- The minimum purchase order for such certificates is 50,000 units (the nominal value for each unit is IRR 1 million). The offering method is based on book-building.
- Flagged symbols for such certificates, filling risk statement by buyers, continuous credit rating assessment until maturity, requiring the confirmation of collaterals based on the contract subject to downgrading from BBB level, amending the contracts pertaining to issuing such certificates to compile a new legal framework compatible to the new condition, and clear specification of the duties of each unit in case of default are other stipulations for rating of debt securities.
The credit rating agencies shall comment on the solvency of issuer/founder to retire the principal and interest of the securities in maturity, considering the financial and liquidity status.