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ARCHIVE | Criteria | Structured Finance | CMBS: U.S. CMBS Legal And Structured Finance Criteria: Appendix VII: The Credit Impact Of Secured Creditor Environmental Insurance On CMBS Transactions May 03
Standard & Poors, May 2003
Abstract
Standard & Poor's has reviewed and evaluated the credit impact of secured creditor environmental insurance policies on CMBS transactions for the past seven years. The purpose of this article is to outline Standard & Poor's perspective on the credit impact resulting from the use of secured creditor environmental insurance instead of, and in addition to, traditional environmental due diligence. A secured creditor environmental insurance policy must cover the outstanding principal balance of the loan plus accrued interest, and other outstanding expenses, in order for Standard & Poor's to assess any credit impact. The policy would be triggered by the combination of a default under the loan agreement and the discovery of on-site pollution. The policy should then pay the trust...
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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