 "Investors need to fine tune investment strategy to tackle rising rates")
The recent defaults by IL&FS and its subsidiaries have shaken investors’ faith in the ratings provided by credit rating agencies. The ratings of its debt instruments plunged from AAA to D (default) within a few months. While investors who invest directly in bonds cannot ignore ratings, they do need to take a few additional precautions.
Read the credit report: Before investing in a debt instrument, go to the concerned rating agency’s website and obtain the credit report on the borrower. This report contains the rating, which indicates where the company stands regarding probability of repaying its dues (see box). “An
