Fitch Ratings will be introducing rating outlooks for U.S. structured finance deals.
This move is aimed at offering more forward-looking information to the market. The rating agency also released a special report today addressing investor inquiries regarding these outlooks.
Similar to its other rating groups, the agency's rating outlook indicates the
likely direction of any rating change over a one- to two-year period that may be Positive, Negative, Stable or, occasionally, Evolving.
Fitch will review its rating outlooks concurrently with its review on a structured finance deal, said Group Managing Director John Bonfiglio, head of U.S. structured finance at the rating agency.
"Fitch will assign rating outlooks to each rated tranche to offer investors a forward-looking opinion about the medium-term prospects of a tranches performance,' Bonfiglio said. "Rating outlooks may be influenced by factors that are quantitative, including performance relative to expectations, and more qualitative in nature, including prospective economic and sector developments affecting collateral."
The agency will also supplement its rating outlooks with comments that provide reasons for the assigned or revised outlooks similar in tone to its rationale long-term rating changes. This will give the market a better understanding of the potential future performance of the tranches ratings.
