CMA approves registration of CARE Ratings (Africa) Private Ltd

Nairobi, 14 February, 2019…The Capital Markets Authority (CMA) has approved the registration of CARE Ratings (Africa) Private Limited (CRAF) as a credit rating agency, to evaluate the relative creditworthiness of issuers of securities and assign ratings to such securities.

Based in Mauritius, CRAF is a subsidiary of Care Ratings Limited (India) which has a majority holding of 78 percent in the firm. Care Ratings India is listed on both the National Stock Exchange and Bombay Stock Exchange and has established itself as the second-largest credit rating agency in India, with the rating volume of debt of around US$1.6 trillion as at 31 March, 2018.

The Authority’s Chief Executive Mr. Paul Muthaura noted, ‘we welcome the registration of Care Ratings Africa cognizant of the opportunities it will create, to leverage Care India’s experience and track record in Kenya’s capital markets.’ CRAF is also licensed in the same capacity by Financial Services Commission, Mauritius and recognized by Bank of Mauritius as an External Credit Assessment Institution (ECAI).

CRAF will receive operational support from CARE Ratings to ensure it has adequate resources to provide quality credit opinions for financial instruments. This is informed by a Name License and Technical Assistance agreement entered into between the subsidiary and its majority shareholder. CRAF will also receive ratings methodologies developed by CARE Ratings. The shareholder will also provide “back office support” with regards to best international compliance functions.

CARE Ratings Limited India is also indirectly recognized by Hong Kong Monetary Authority as an external credit assessment institution (ECAI) for the purposes of the regulatory capital framework in Hong Kong.

This brings the number of licensed credit rating agencies in Kenya’s capital markets to four.