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ARCHIVE | Criteria | Structured Finance | CDOs: Criteria For Rating Synthetic CDO Transactions: Timely Payment Of Interest And Ultimate Payment Of Principal Sep 04
Standard & Poors, Sep 2004
Abstract
In a funded or partially funded CDO, Standard & Poor's rating on the issued notes addresses the likelihood of full payment of interest either on a timely or ultimate basis, and ultimate payment of principal in accordance with its terms. The source and timing of all the payments that need to be made according to the terms of the notes is therefore an important element in Standard & Poor's analysis. These payments can include interest, principal, fees, credit-protection payments, trading losses, and termination payments. Nonpayment of any of these amounts typically constitutes an event of default or termination event. This analysis is not relevant for the credit assessment of unfunded CDSs, given that in most cases the credit assessment addresses...
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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