Ratings Services Disagree on Requisite Levels of Credit Enhancement for Certain Transactions
May 12, 2011
&PTop rating agencies continue to have different requirements for issuers to obtain the most favorable ratings on certain transactions, including the all-important criterion of credit enhancement. The latest manifestation of this dynamic involved a recent $1.45 billion servicer advance receivable transaction by American Home Mortgage Servicing Inc., a deal that passed muster with DBRS and Standard & Poor’s. But AHMS withdrew the deal from consideration at Fitch Ratings because of that company’s more conservative rating criteria. DBRS and S gave most components of the transaction a triple-A rating. That included two $325 million senior term notes and a $600 million senior variable funding note. The deal included subordinate term notes of $150 million and $50 million. The primary assets of...
At press time, MFA's shares were up slightly on the day to $10.32 a unit. Its 52-week low is $9.36, its high $13.45.
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