CLOs

Rating Agency Developments

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On August 2, 2016, Moody’s issued a report entitled: Moody’s Approach to Rating Securitisations Backed by Non-Performing and Re-Performing Loans.  Report.

On August 1, 2016, S&P issued a report entitled: General: Global Methodology for Rating Retranchings of ABS, CMBS, and RMBS.  Report.

On July 29, 2016, DBRS issued a report entitled: Global Methodology for Rating Banks and Banking Organisations.  Report.

On July 28, 2016, Fitch issued a report entitled: Fitch Updates Global Rating Criteria for CLOs and Corporate CDOs.  Report.

On July 28, 2016, Fitch issued a report entitled: Fitch: No Rating Changes from Update to Global LMI Criteria in RMBS.  Report.

Rating Agency Developments

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On July 19, 2016, DBRS published its criteria for rating CLOs backed by loans to European SMEs (small and medium-sized enterprises).  Report.

On July 18, 2016, Fitch published its criteria for assigning new and existing ratings to sovereign issuers.  Report.

On July 18, 2016, Fitch published an addendum that supplements its counterparty criteria for structured finance and covered bonds.  Report.

On July 14, 2016, DBRS published an update to its criteria for evaluating servicers in North American CMBS transactions.  Report.

On July 14, 2016, DBRS published its criteria for rating European covered bonds.  Report.

On July 14, 2016, DBRS published its master European structured finance surveillance methodology.  Report.

Rating Agency Developments

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On February 9, DBRS published its methodology for rating Canadian government STRIP bonds. Report.

On February 9, DBRS published its methodology for guarantees and other forms of support. Report.

On February 9, DBRS published its methodology for rating CLOs and CDOs of large corporate credit. Report.

On February 9, DBRS published its methodology outlining cash flow assumptions DBRS applies to rating corporate credit securitizations. Report.

Rating Agency Developments

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On January 6, DBRS published its methodology for rating European commercial mortgage loans and European CMBS transactions. Report.

On January 4, DBRS published its preferred share and hybrid security criteria for corporate issuers. Report.

On January 4, DBRS published its methodology for rating holding companies and their subsidiaries. Report.

On January 4, DBRS published its methodology for rating CLOs backed by loans to European Small and Medium-Sized Enterprises (SMEs). Report.

On January 4, DBRS published its methodology for rating European RMBS transactions. Report.

On December 31, DBRS published its methodology for rating European structured finance servicers. Report.

On December 31, Moody’s published its rating methodology for investment holding companies and conglomerates. Report.

Federal Reserve Acts to Extend Conformance Period Under Volcker Rule for Legacy Covered Funds Until July 2017

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On December 18, the Federal Reserve Board announced that it has acted under Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the Volcker Rule, to give banking entities until July 21, 2016, to conform investments in and relationships with covered funds (i.e., most private equity and hedge funds) and foreign funds that were in place prior to December 31, 2013 (“Legacy Covered Funds”). The Board also announced its intention to act next year to grant banking entities an additional one-year extension of the conformance period until July 21, 2017, to conform ownership interests in and relationships with Legacy Covered Funds.

Section 619 generally prohibits insured depository institutions and any company affiliated with an insured depository institution from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund.

The Board previously extended the conformance period to July 21, 2015, when the agencies adopted rules to implement Section 619. The Board also previously issued a statement in April 2014 indicating that it intended to grant two additional one-year extensions of the conformance period for banking entities to conform ownership interests in and sponsorship activities of collateralized loan obligations (“CLOs”) that are backed in part by non-loan assets and that were in place as of December 31, 2013. The December 18 action is consistent with the Board’s previous announcement regarding CLOs and extends the conformance period for other types of Legacy Covered Funds.

Rating Agency Developments

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On January 23, Fitch released its criteria for analyzing interest rate stresses in structured finance transactions and covered bonds.  Fitch Report.

On January 22, DBRS released its methodology for rating wind power projects.  DBRS Report.

On January 22, DBRS released its methodology for rating solar power projects.  DBRS Report.

On January 22, S&P released its methodology for rating Japanese CMBS.  S&P Report.

On January 22, Fitch released an exposure draft seeking comments for sovereign risk impact on rating structured finance and covered bonds.  Fitch Report.

On January 21, DBRS released its request for comment for rating supranational institutions.  DBRS Report.

On January 21, DBRS released its cash flow assumptions for rating CLOs and CDOs backed by corporate debt.  DBRS Report.

On January 21, DBRS released its methodology for rating CLOs and CDOs backed by large corporate debt.  DBRS Report.

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Rating Agency Developments

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On November 20, S&P released a request for comment on its methodology for rating CDOs of project finance debt.  Comments must be submitted by December 21.  S&P Request for Comment.

On November 19, Moody’s released its updated approach to rating CLOs.  Moody’s Report.

On November 19, Moody’s released its approach to rating corporate synthetic CDOs.  Moody’s Report.

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Rating Agency Developments

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On May 9, Fitch released its guidelines for rating tender option bonds.  Fitch Report.   

On May 9, Moody’s released its methodology for rating CLOs.  Moody’s Report.

On May 8, Fitch released its surveillance criteria for franchise loan ABS.  Fitch Report. 

On May 7, S&P released its criteria for multiple-use special-purpose entities.  S&P Report. 

On May 7, S&P released its criteria for assessing guarantees in structured finance transactions.  S&P Report.   

On May 7, S&P released its criteria for asset isolation and special-purpose entities in structured finance transactions.  S&P Report. 

On May 7, Moody’s released its methodology for rating consumer loan ABS transactions.  Moody’s Report. 

On May 7, Moody’s released its guidelines for incorporating sovereign risk into (i) rating CDOs of SMEs in Europe; (ii) rating multi-pool financial lease-backed transactions in Italy; and (iii) rating EMEA auto loans.  Moody’s Report (SME CDO).  Moody’s Report (Italy).  Moody’s Report (EMEA Auto Loans). 

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Rating Agency Developments

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On January 10, DBRS released the following rating methodologies:

On January 10, S&P updated its methodology and assumptions for CLOs backed by European small and midsize enterprises (SMEs).  S&P Release. 

On January 8, Moody’s released its methodology for assessing RMBS servicing quality.  Moody’s Release. 

On January 7, Fitch updated its criteria for rating derivative product companies.  Fitch Release.  Fitch Report.