Definition of a default of a rated entity

EuroRating considers a rated entity as defaulted where any of the following type of event has occurred:

• submission by the rated entity a formal application for protection against creditors (i.e. a petition for remedial proceedings) or a petition for bankruptcy, or a declaration by the court of bankruptcy or receivership over the rated entity, which events are likely to result in a lack or delay in future payments of financial liabilities;

• a missed or delayed disbursement of a contractually required interest or principal payment in respect to debt or debt-like obligations, unless payments are made within a contractually allowed grace period or are missed due to purely technical or administrative errors, which are not related to the ability or willingness to make the payments and are cured in a very short time;

• a distressed exchange of debt if the offer implies the investor will receive less value than the promise of the original securities;

• due to its bad financial situation the rated entity is covered by formal regulatory receivership and/or a rescue programme or liquidation programme (this applies only to banks).