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ARCHIVE | Criteria | Corporates | General: Securitization's Effect On Corporate Credit Quality
Standard & Poors, Nov 2005
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.
Abstract
(Note: The focus of this article is on securitizations undertaken by industrial companies--not by financial institutions, which use securitization extensively to fund mortgage and credit card loans, as well as other types of finance assets. Nevertheless, Standard & Poor's Ratings Services' fundamental approach to analyzing securitization is the same in both the industrial and banking sectors.) Asset securitization is a form of financing that has been widely used across industries and across the rating spectrum. Securitizations are important financing sources for many companies, often providing both lower cost and more diverse sources of funding and liquidity than available to the company otherwise. The ability to securitize assets provides additional financial flexibility and is regarded as a positive credit factor. Apart...
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