marketwatch TECHNICAL UPDATE (TT Nov06 p10-11)

Moody’s covenant framework comes under fire from ACT
The ACT has raised a number of concerns with credit ratings agency Moody’s about its plans to introduce a covenant research and assessment framework for non-financial issuers (see The Treasurer, October, page 8). The agency plans to analyse indenture covenants to provide investors with a formal matrix that would score more highly those covenants that Moody’s considers offer greater protection to the bondholder in the event of corporate financial distress.