Rating Agency Developments

On March 6, Moody’s released its updated methodology for rating CDOs backed by structured finance assetsMoody’s Report.

On March 5, Fitch released its criteria for granular corporate balance-sheet securitizations (SME CLOs).  Fitch Report.

On March 3, DBRS released its U.S. RMBS securities model and rating methodology.  DBRS Report.

On March 3, DBRS released its methodology for rating U.S. private student loan securitizationsDBRS Report.

On March 3, DBRS released its methodology for rating U.S. federal family education loan program (FFELP) securitizations.  DBRS Report.

Note: Free registration is required for rating agency releases and reports.

Rating Agency Developments

On February 14, Fitch released its criteria for rating U.S. commercial mortgage servicersFitch Report.

On February 13, Fitch released its criteria for rating RMBS in Latin AmericaFitch Report.

On February 11, Moody’s released its criteria for rating resecuritizations backed by RMBS and CMBSMoody’s Report.

Note: Free registration is required for rating agency releases and reports.

Rating Agency Developments

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

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

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

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

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

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

Note: Free registration is required for rating agency releases and reports.

Rating Agency Developments

On January 15, DBRS released its methodology for rating asset management companies.  DBRS Report.

On January 13, Fitch released its criteria for rating dealer floorplan ABSFitch Report.

On January 13, Fitch released its criteria for rating global money market fundsFitch Report.

Note: Free registration is required for rating agency releases and reports.

Rating Agency Developments

On December 12, Moody’s released its methodology for rating intellectual property ABS.  Moody’s Report.

On December 12, Fitch released its criteria for rating pooled multifamily housing bonds.  Fitch Report.

On December 11, Fitch released its criteria for surveillance of existing U.S. CMBS fixed-rate and multi-borrower transactions.  Fitch Report.

On December 9, DBRS issued a request for comment on rating CLOs and CDOs of large corporate credit.  Comments must be received by January 6, 2014.  DBRS Report.

Note: Free registration is required for rating agency releases and reports.

Liquidators of Bear Stearns Hedge Funds Accuse Rating Agencies of Fraud

On November 12, the liquidators for two Bear Stearns overseas hedge funds filed their complaint against McGraw Hill, Standard & Poor’s, Moody’s, and Fitch (collectively the rating agencies) in an action in New York Supreme Court alleging that fraudulent ratings led to over $1 billion in losses for the funds’ investors.  According to the complaint, the funds invested in a portfolio of high-grade structured finance products, including CDOs and RMBS, where “at least 90% had the highest rating available,” and therefore depended heavily on ratings in making investment decisions.  The complaint alleges that the rating agencies knew that the ratings assigned to the securities in which the funds invested were false.  Plaintiffs claim that the rating agencies lacked independence from the issuers of the securities and that their ratings were tainted by a desire to maintain market share in a profitable industry.  The funds also allege that the rating agencies used relaxed standards in their initial ratings and subsequently failed to conduct proper ongoing surveillance of rated securities, leading to delays in downgrading ratings for allegedly faulty securities.  The liquidators initially commenced the action in July through New York’s summons with notice procedure.  Complaint.

Rating Agency Developments

On October 17, DBRS published revised rating methodology for Canadian consumer auto-backed securitizationRelease.

On October 16, Fitch published an update of its rating criteria for toll roads, bridges and tunnelsFitch Release.

On October 15, DBRS published rating methodology for CLOs backed by loans to European small and medium enterprisesRelease.

On October 15, DBRS published rating methodology for Canadian equipment lease securitizationsRelease.

On October 14, Fitch published an update of its rating criteria for commercial real estate loans securing covered bondsFitch Release.

Note: Free registration is required for rating agency releases and reports.