The Association warns that the rating modifier proposal could impair capital raising and lead to the sudden sale of structured finance securities if existing credit rating scales are changed.
The Association warns that the rating modifier proposal could impair capital raising and lead to the sudden sale of structured finance securities if existing credit rating scales are changed. The proposed ratings modifiers would be a completely cosmetic solution, SIFMA says and recommends adding additional information, explaining the basis of the rating, to the agencies’ pre-sale rating reports.
Enhanced disclosure of collateral credit quality characteristics by the credit ratings agencies - such as inputs to ratings, methodologies and exceptions applied in establishing ratings, and the sensitivities of ratings to key variables - seems to be a much more informative way to educate investors, SIFMA argues.
Press release
Letter
© SIFMA - Securities Industry and Financial Markets Association
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