Comments on: Can we now admit it’s time to end issuer-pays credit rating model? http://blogs.reuters.com/alison-frankel/2013/02/05/can-we-now-admit-its-time-to-end-issuer-pays-credit-rating-model/ On the Case Fri, 15 Jul 2016 20:42:45 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: EllieK http://blogs.reuters.com/alison-frankel/2013/02/05/can-we-now-admit-its-time-to-end-issuer-pays-credit-rating-model/#comment-2252 Tue, 19 Feb 2013 11:24:38 +0000 http://blogs.reuters.com/alison-frankel/?p=1769#comment-2252 It makes sense to consider an alternative to issuer-paid credit ratings for securitized transactions. That includes CBO’s, CLO’s and various asset-backed “products” that caused, and are continuing to cause us so much grief.

Structured finance is only one part of a credit rating agency’s business (granted, it is almost certainly the most profitable part). The bulk of S&P, Moody’s and Fitch’s ratings are for corporate bonds, public finance and ever-unpopular sovereign debt. I don’t see any obvious solutions to the issuer pays credit rating model. Rather, I don’t see any alternative that isn’t effectively passed on to tax payers, which hardly seems fair. How else could sovereign bonds be rated?

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