DBRS Morningstar notes that on March 11, 2020, the World Health Organization (WHO) declared the Coronavirus Disease (COVID-19) outbreak a global pandemic. Effects on the global economy are beginning to take hold, notably in places where the number of cases has precipitously increased.
With governments and businesses imposing travel restrictions on their citizens and staff, the ability to hold business meetings in person is increasingly affected. At DBRS Morningstar, certain rating methodologies, those of both legacy organizations (DBRS and Morningstar Credit Ratings), set forth the use of management meetings and on-site reviews as part of the rating analysis. Because of the fluid nature of the COVID-19, DBRS Morningstar may adjust the form of management meetings and on-site reviews to be remote, for example, by video conference, telephone, and/or email until further notice.
Where on-site property visits are supporting the ratings process, DBRS Morningstar may rely on a review of other sources to assess a property’s physical attributes and position in its respective market, such as the appraisal, property condition report, or other third-party leasing sources; rely on average qualitative adjustments made for past comparable real estate assets; and/or make conservative property quality adjustments in absence of other information.
For more information on coronavirus and structure finance methodologies, see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/358308
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