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ARCHIVE | Criteria | Structured Finance | Request for Comment: Clarification Of The Issuer Credit Ratings For Covered Bonds Apr 09
Standard & Poors, April 2009
Abstract
On Feb. 4, 2009, Standard & Poor's Ratings Services published a request for comment on proposed changes to its criteria for rating covered bonds (see 'Related Research' below). The key proposed change is an explicit 'soft link' between certain covered bond ratings and the issuing bank's rating. This article clarifies the rating to which covered bond ratings would be linked, if the proposal is adopted. We are proposing that ratings on covered bonds become soft-linked to the rating on the issuing banks for certain covered bond programs with asset-liability mismatches. In particular, we are proposing a framework for categorizing covered bond programs into one of three distinct risk categories (see 'Related Research' below). A program's risk category, in turn, will...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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