Rating is an interactive process relying primarily in gathering information from the issuer and supplementing it with strategic information obtained from outside independent sources. The entire process is aimed at evaluating (a) Financial Risk and (b) Business Risk Information with regard to (a) is generally provided by the company requesting for rating and, only when necessary, such information is corroborated or complemented by information from other sources. However, comprehensive information with regard to (b) is not readily available from any identifiable source. PACRA has, therefore, proceeded to develop its own database consisting of economic data by industrial sub-sectors. Additionally, it continuously monitors macroeconomic developments and important government policy changes (like fiscal adjustments) for determining their likely impact on specific sectors and companies.

PACRA does not assign unsolicited ratings. This policy is based on our sensitivity regarding the motivation for such a practice: globally, unsolicited ratings have come under criticism as they seem to be a means of pressurizing recalcitrant entities to subject themselves to rating. Again, the value of credit rating flows from the interactive nature of the exercise. Thus, unless the rated entity has an opportunity to share the reasons for any delinquent performance in the past and its view on prospects, the rating opinion may not be reliable.

The rating process begins with a careful review of an entity's published information. From this review, analysts (normally two, the lead and support analyst, are assigned to each rating assignment) determine what additional data are needed and a detailed questionnaire is sent to the client. An initial rating assessment is made and discussed internally. A discussion agenda is then prepared for a meeting with the client company's senior management.