Our comments primarily 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, and indeed we recognise that corporates are also investors and users of ratings.
In summary, our understanding is that the proposal involves expanding recovery rating coverage both by blending default and recovery prospects reflecting a revised ‘notching’ framework – raising or lowering a specific issue rating from that of its issuer credit rating – and by extending the range of issuers and instruments rated in this way.
