Rating agencies Fitch and Japan's Rating and Investment Information (known as R&I) have announced that they will jointly rate certain structured finance transactions.
To begin with they will concentrate on co-rating types of deals which are new to the Japanese market, whether that is because they are backed by new asset classes or feature new structures. Other deals may be co-rated if the agencies feel that it will help originators and investors.
"This tie-up will combine R&I's excellent market position with Japanese investors and issuers with our expertise in rating a wide range of asset classes, as well as our global recognition," said Robin Monro-Davies, CEO of Fitch.
Market watchers said that the tie-up makes sense from both parties point of view. "Fitch is swapping its expertise for access to the local market, as R&I have pretty good contacts," an ABS analyst said. "It has been difficult for Fitch because they got here relatively late and Moody's and S&P are pretty well entrenched. Also, there has not been the volume of international securitizations that was expected, as issuers have stayed in the domestic market, which is where R&I are strong."
Monro-Davies added: "I hope this is the start of an ever closer relationship between our two companies," leaving experts wondering whether a full merger was in the cards.