Moody’s Investors Service has modified its criteria for what counts as a structured finance instrument, the agency said today.
This determines whether Moody’s attaches the (sf) suffix to a deal.
Now considered structured finance are student-loan-backed bonds that are issued by a non-profit or public agency and consist of fewer than three classes of debt. This covers all Moody’s-rated deals in this asset class. Also getting the (sf) for the first time are U.S. state and local housing finance agency debt backed by a pool of self-liquidating mortgages not actively managed by the issuer.
No longer falling under the structured-finance rubric are future flow transactions that feature full linkage between the originator’s credit rating, the assets and the senior notes while having no tranches subordinated to the originator’s note.
The attached spreadsheet details which transactions rated by Moody's either gain an (sf) or lose it.