Our comments reflect the considerations of an issuer, although the issuer view must itself take account of the investor perspective and the overall functioning of the market.
In summary, our understanding is that the proposal involves assigning separate short-term issuer and instrument ratings formalising the incorporation of recovery given default considerations within short-term ratings of instruments.
Our conclusion would be that extending the use of Issuer Default Ratings and clarifying that issue specific rating incorporate a weighting for recovery given default expectations serve a useful purpose of supplying the market with additional information in a manner that is already well understood for long term ratings.