RATING ACTIONS, COMMENTARIES AND PRESS RELEASES
GLOBAL POLICY
Effective Date:
Owner:
Applies to:
June 1, 2017
Global Corporate Finance and Global Structured Finance
All DBRS Covered Personnel
I. Purpose and Scope
The Rating Actions, Commentaries and Press Releases Global Policy (“Policy”) provides the framework for
DBRS to issue ratings, rating actions, commentaries and press releases. This Policy applies globally and
should be read in conjunction with related DBRS policies and procedures.
II. Rating Action(s)
Credit ratings, as defined in the Credit Ratings Global Policy, may be assigned, upgraded, downgraded,
placed Under Review with the appropriate Implications designation, confirmed and discontinued. Certain
ratings are also assigned Rating Trends that may change over time. The Structured Finance and Covered
Bonds Rating Committee Global Procedure, Corporate Finance Rating Committee Global Procedure, and
Issuing Press Releases Global Procedure set forth the processes DBRS follows for rating actions determined
by a rating committee.
A.
1
Ratings “Under Review”
1. When a significant event occurs that directly impacts the credit quality of a particular entity or
group of entities, DBRS attempts to provide a prompt rating opinion.
2. In cases when there is uncertainty regarding the outcome, and DBRS is unable to provide an
objective, forward-looking opinion in a timely fashion, then the rating(s) of the issuer(s) are
typically placed “Under Review” with the appropriate Implications designation of Positive,
Negative or Developing.
3. DBRS also places ratings “Under Review” in situations where there has been no major
announcement or event for the issuer, but in the opinion of DBRS the current rating on the
security may no longer be appropriate due to a change in the credit status of the issuing entity for
other reasons, such as the ongoing results of the company and/or the outlook for the industry. In
most such cases, where additional time is required for further analysis DBRS places the rating
“Under Review”.
4. Furthermore, DBRS may also place a rating “Under Review” if DBRS has announced that one or
more of its rating methodologies, models 1 or criteria (“Methodologies”) that apply to such a
rating(s) is being revised and the announcement indicates that the outcome of the rating affected
For purposes of this Policy, models refer to models that are a substantial component of a rating Methodology.
Effective Date: June 1, 2017
Document Control Number: 20170427-061
1
by the revision is be taken at a later time after the Methodologies are approved.
5. Using “Under Review with Positive Implications” or “Under Review with Negative Implications” is
a more significant action than changing a Rating Trend to Positive or Negative as rating changes
are considered more likely to occur sooner with the former than the latter.
6. When a decision is made by DBRS to place a rating “Under Review”, DBRS generally takes the
following actions:
a. Provide initial guidance as to the opinion of DBRS by noting whether the Under Review
action has Positive, Negative or Developing Implications. These qualifications indicate the
initial assessment by DBRS of the impact on the credit quality of the security or issuer;
however, as situations and potential rating implications may vary, the final rating
determination may depart from the initial assessment.
b. Remove the existing Rating Trend(s) of Stable, Positive or Negative, replace the existing
rating trend(s) with “--" and add a Rating Trend when the rating(s) is removed from Under
Review status. See section C for more information on Rating Trends.
7. When a rating is placed Under Review, DBRS views this as a temporary situation; therefore DBRS
strives to complete the review and remove the rating from this status as soon as it is appropriate
to do so.
8. In the event that a lengthy Under Review period is anticipated, DBRS may provide such guidance
in a press release and may, if appropriate, provide guidance as to the anticipated rating that would
emerge under a proposed scenario.
9. In the event that DBRS decides to discontinue a rating that is Under Review, DBRS endeavors to
resolve the Under Review status prior to the discontinuation.
B.
Ratings “Interest in Arrears”
1. On occasion, there may be Structured Finance transactions or deals, such as commercial
mortgage-backed securities ("CMBS"), where interest payments are in arrears but the cumulative
or on-going shortfall is expected to be ultimately recoverable or paid. Where the interest shortfall
is a question of timing in the shorter term, and not of ultimate payment, DBRS notes this with the
'Interest in Arrears' rating action for the class affected. An example where this may occur is where
one or more of the loans within a CMBS deal has been subject to an appraisal reduction event,
which is a structural feature within CMBS which prompts a servicer to advance a partial payment
based on a lower valuation. This event may cause a particular class to have an interest shortfall,
however the interest is ultimately recoverable at the time the loan is resolved.
2. Using this action allows DBRS to recognize that the interest shortfall does not impact the overall
credit quality and to maintain an appropriate credit risk rating.
C.
Rating Trends
1. DBRS uses “Rating Trends” for its ratings in the Corporate Finance sector, Pension Funds and the
global CMBS sector. Rating Trends provide guidance in respect of DBRS’s opinion regarding the
outlook for a rating. Rating Trends have three categories: “Positive”, “Stable” or “Negative”. The
Rating Trend indicates the direction in which DBRS considers the rating may move if present
circumstances continue, or in certain cases as it relates to the Corporate Finance sector, unless
challenges are addressed by the issuer.
2. Within the Corporate Finance sector and Pension Funds, in general, DBRS assigns Rating Trends
Effective Date: June 1, 2017
Document Control Number: 20170427-061
2
based primarily on an evaluation of the issuing entity or guarantor itself, but may also include
consideration of the outlook for the industry or industries in which the issuing entity operates
giving consideration to developments that could positively or negatively impact the sector or the
company’s debt position within the sector.
3. Rating Trends in the global CMBS sector may be changed if there are performance trends within
the underlying loans or assets securing the transaction that are generally positive or negative such
as occupancy declines, concentrations in a certain property type or market and/or asset level cash
flow changes that may be viewed as sustainable. Additionally, within the global CMBS sector, a
Positive Trend may be assigned if the credit support has improved, but the impact of adverse
selection is still being evaluated. Alternatively, a Negative Trend may be assigned if there is an
increase in watch list loans or specially serviced loans.
4. It is often the Rating Trend that reflects the initial pressures or benefits of a changing environment
rather than an immediate change in the rating. A Positive or Negative Trend is not an indication
that a rating change is imminent. Rather, a Positive or Negative Trend represents an indication
that there is a greater likelihood that the rating could change in the future than is the case if a
Stable Trend was assigned to the security.
5. Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved
within a twelve month period. However, in some instances, new factors emerge which may cause
the Positive or Negative Trend to be maintained, even as the original factors become clarified or
resolved. DBRS generally notes any changes to the basis for the Positive or Negative Trend.
D.
Discontinued Ratings
1. When an entity retires all of its outstanding securities within a particular category of rated
instruments and has no plans to reissue in the near future (e.g., commercial paper, long-term
debt, or preferred shares), DBRS discontinues the rating.
2. Other circumstances where DBRS may also discontinue ratings include situations where the rated
debt is no longer in the public market, where a defeasance structure removes the credit risk of
the issuer as a consideration, where the debt comes to be held by a few large institutions that do
not want ongoing DBRS ratings, or where DBRS elects to discontinue its public rating coverage of
a particular entity or security.
3. In the specific case where an issuer’s ratings have been downgraded to “D”, DBRS may maintain
or discontinue the rating. In rendering this decision DBRS considers:
a. The value for investors of DBRS continuing to have ratings coverage of the issuer; and
b. The likelihood of the rated debt being upgraded as the default situation is remedied which
may include a debt restructuring action.
In cases where neither of these factors supports continuing coverage, the rating is generally
discontinued 2
III. Commentary
1. A commentary is a publication by which DBRS makes its opinions known to the market without
2
Refer to the Default Definition document for more information.
Effective Date: June 1, 2017
Document Control Number: 20170427-061
3
taking a rating action.
2. DBRS issues a commentary, in the form of a short press release or a longer document, to address
situations that may have implications for a specific issuer, a group of issuers or an entire industry,
often following a new release of information or announcement.
IV. Press Releases
1. Press releases cover topics including, but not limited to, DBRS public rating opinions, 3 new and
changed rating Methodologies, the availability of industry-specific reports and commentaries, and
significant regulatory-related events.
2. DBRS endeavors to issue all press releases in a timely manner in accordance with applicable
regulations, placing a high priority on informing the public of its credit rating opinions in respect
of the public credit ratings maintained by DBRS, as soon as possible following the rendering of the
decision by a rating committee.
© 2017, DBRS Limited, DBRS, Inc., DBRS Ratings Limited and DBRS Ratings México, Institución Calificadora de Valores S.A. de C.V. (collectively DBRS).
All rights reserved.
3
This does not apply to private credit ratings or credit ratings for certain private placement transactions.
Effective Date: June 1, 2017
Document Control Number: 20170427-061
4