Fitch Ratings made headlines after it published a widely reported unsolicited commentary on Credit Suisse's prime RMBS deal called CSMC Trust 2012-CIM.
Fitch was actually initially asked to rate the deal and the issuer "paid the full fee upfront," said one source familiar with the transaction. When the agency said that it cannot rate the deal triple-A, the source said the issuer dropped the agency.
"By that time all of the investors were aware that Fitch would not be rating the deal and the reasons why Fitch could not give the deal the triple-A," the source said.
The fact that Fitch commented on why it could not rate the deal at triple-A was actually "welcomed" by the issuer and was "no surprise," the source said, because he said that ultimately everyone is pushing for more transparency. "They want investors to know what is out there," the source said.
This positive perception of Fitch's move is perhaps supported by the fact that the rating firm's commentary had no material impact on the deal's pricing. The source said that investors had shown good interest in the offering. According to Bloomberg, the triple-A tranche priced with a coupon rate of 3.38%.
Standard & Poor's and DBRS ultimately gave the deal's Class A-1 and A-2, which had a combined worth of roughly $683 million, a triple-A rating.
Fitch published its unsolicited commentary on Friday, after the deal had priced, citing that the enhancement levels for the prime RMBS deal were not enough to support a triple-A rating.
Post credit crisis and in the current world of 17-g5, the expectation has always been that rating agencies would offer up more unsolicited ratings for deals where the ratings greatly differed from each of the respective agencies' point of view.
However, much of the expected unsolicited ratings traffic has yet to materialize because agencies believe that access to full document reports could create a legal liability that has yet to be sorted out. For now, the agencies are sticking to commentaries, where they voice opinions that differ from their competitors.
In June last year, Fitch said in a press release that its policy was and would remain that "initiated ratings be issued only if there is strong investor interest and Fitch has a materially different credit opinion on a transaction compared to the mandated agencies."
S&P and Moody's Investors Service have also issued unsolicited commentary, specifically on the Redwood Trust deals.
Additionally, Moody's has written sector commentaries, including one on the proposals it was receiving for CLOs that had most or all of the collateral pool backing the securitization comprising loans transferred to the SPV through participations of the underlying loans. It also wrote another piece on RMBS resecuritizations.