DBRS Morningstar Correction: SASB RFC Ratings Impact

DBRS Morningstar corrected a November 14, 2019, press release requesting comment on its “North American Single-Asset/Single-Borrower Ratings Methodology” (the Methodology) to clarify the Methodology’s ratings impact. In the original release, the ratings-impact statement took into consideration updates to the Loan-to-Value (LTV) Sizing Benchmarks but did not address potential movement in the Cap Rate Ranges. In response to investor inquiry, as both LTV Sizing Benchmarks and Cap Rate Ranges are critical to the ratings, DBRS Morningstar has provided additional guidance on the ratings impact by applying a statistical analysis of potential cap-rate adjustments based on property type. As a result, the potential for ratings downgrades is significantly minimized to 3% to the applicable certificates rated by DBRS Morningstar. DBRS Morningstar will review all ratings at the transaction level to check that the appropriate qualitative adjustments to the LTV Sizing Benchmarks and new Cap Rate Ranges are applied. As a result of these updates, DBRS Morningstar extended the request for comment period on the Methodology to December 23, 2019.

Please see the updated press release for more information.

Notes:
DBRS Morningstar methodologies are publicly available on its website www.dbrs.com under Methodologies & Criteria.

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