Fitch Ratings launched its issuer report grades (IRGs) for European ABCP conduits. The grades indicate the quality of post-issuance performance reports for the European ABCP conduits publicly rated by the rating agency.
"The aim of this initiative is to enhance the quality of post-issuance reporting standard in this sector," says Andy Brewer, head of EMEA structured finance performance analytics at the rating agency. "When Fitch rolled out IRGs for European structured finance the grades had an immediate positive impact on transparency in the sector; we expect a similar impact in the ABCP sector."
The post issuance reporting standards give clear guidance for issuers, originators and servicers on how they can make their reports more useful for investors and Fitch.
The agency encourages certain financial sponsors of deals to improve their reporting standards. IRGs were not extended to ABCP conduits in past years because these deals have a different structure, with the potential to comprise multiple transactions, hold a wide variety of asset types, and originate from many different sellers.
This structure also differs from a usual term transaction, which is usually made up of only one asset type and one seller, Fitch said.
