DBRS Publishes Updated Canadian Trade Receivables Securitization Methodology

DBRS has today released an updated version of its methodology for analyzing Canadian trade receivables securitization transactions. The methodology provides an explanation of the analytical reasoning behind certain structuring methods and the basis for computing key variables, keeping in mind that a large number of qualitative factors influence every transaction.

“Canadian trade receivables transactions show some key strengths,” says Scott Bridges, Senior Vice President, “such as fast turnover, generally investment-grade sellers and low absolute loss rates.” The vast majority of all Canadian trade receivables transactions rated by DBRS have been structured to an R-1 (high) level.

The updated methodology, however, expands on the treatment of transactions by non-investment-grade sellers and servicers. “When a seller is non-investment grade,” adds Mr. Bridges, “there is increased potential for external financial pressures on the seller to affect the portfolio performance.”

The methodology providing DBRS's processes and criteria is available by contacting us at info@dbrs.com.