Bangkok--21 Dec--Standard & Poor's
Standard & Poor's Ratings Services today published proposed revisions to its criteria for rating bond anticipation notes. "Request For Comment: Methodology For Rating Bond Anticipation Notes" is available on RatingsDirect on the Global Credit Portal and on www.standardandpoors.com. A teleconference to discuss the proposed criteria will be held on Jan. 6 (see below).
BANs are a type of debt generally structured to rely solely on the proceeds of future bond or note sales for repayment at maturity.
The criteria, if adopted, would establish a linkage between the long-term rating on the type of debt intended to retire the BANs and the short-term rating on the BAN itself.
During the past two years, disruptions in the capital markets included episodes of illiquidity in some short-term debt markets. Reflecting the potential unpredictability of shifts in market preferences, our proposed criteria do not presume that all obligors will always have market access to issue takeout debt at the time of BAN maturity. Although market access for issuing takeout debt to retire BANs remained largely intact during the 2007 and 2008 credit contraction, recent experience such as in the auction rate securities market suggests to us that investor appetites can change quickly. Under our proposed new methodology, we would assess the likelihood that an obligor can retain market access in the context of constrained liquidity in the credit markets.
Standard & Poor's currently maintains ratings on approximately 250 BAN issues. If the criteria revisions proposed here are adopted, we estimate that approximately one-third of the existing BAN ratings may be subject to downward revisions. Of these, we expect that the majority will entail note ratings lowered to 'SP-1' from 'SP-1+'.
Standard & Poor's is requesting that comments on the proposed criteria be submitted in writing by Jan. 31, 2011.
TELECONFERENCE INFORMATION
Standard & Poor's analysts will host a teleconference on Jan. 6, 2011 to discuss the proposed revision to BAN rating criteria.
Live-Dial-In-Numbers:
US/Canada/All Others Toll Free: 1-888-889-6559
US/Canada/All Others Toll: 1-210-234-6461
Conference ID#: 9990327
Passcode: SANDP
Net Enhanced: (Slides Only)
URL: http://www.mymeetings.com/nc/join
Conference Name: PG9990327
Passcode: SANDP
Live Streaming: (Audio Only)
URL: http://www.mymeetings.com, Under Participant Join, select join an event
Conference ID#: 9990327
Passcode: SANDP
Replay Numbers:
US/Canada/All Others Toll Free: 1-866-435-1325
US/Canada/All Others Toll: 1-203-369-1021
Replays will expire on Thursday, Jan. 13, 2011
Replay Web Streaming: (Slides & Audio)
URL: http://www.mymeetings.com/nc/join
Conference ID#: PG9990327
Passcode: SANDP
Replay will expire on Thursday, Feb. 3, 2011
The report is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
Robin Prunty, New York (1) 212-438-2081
James Wiemken, London +44-20-7176-7073
Colleen Woodell, New York (1) 212-438-2118