May 28, 2014 15:05 UTC

Fitch Updates Criteria for Rating Caps and Limitations in Global SF Transactions; No Rating Impact

LONDON & NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Criteria for Rating Caps and Limitations in Global Structured Finance Transactions http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Fitch Ratings has updated its global structured finance (SF) criteria for rating caps and limitations. The update does not contain any material changes and will not have any impact on ratings for existing SF transactions.

The report details factors that may result in a cap being applied when assigning a SF rating in certain circumstances. It also explains some limitations to SF ratings, including characteristics that may mean the assignment of a rating is not possible. Factors that could lead to rating caps or limitations include limited portfolio and data quality, asset concentration and performance volatility, certain legal terms and conditions, excessive market value exposure, sovereign dependency, third-party dependency and issues with incentives of transaction parties.

The updated version of the criteria includes clarification as to limitations on principal-only and interest-only ratings, as well as reference to Fitch's new criteria for sovereign risk in developed markets for SF transactions.

The principles discussed in the criteria are applicable to all asset classes including residential and commercial mortgage-backed securities, asset-backed securities and structured credit transactions. The criteria provide an overarching framework applicable to all SF transactions which is complemented by asset class-specific and cross-sector rating criteria.

The updated criteria report replaces the report of the same name dated June 12, 2013.

Additional information is available at www.fitchratings.com

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Alla Sirotic, +1-212-908-0732
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Stuart Jennings, +44 20 3530 1142
Managing Director
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com


Source: Fitch Ratings