Press Release

DBRS Morningstar Publishes Final Global Methodology for Rating Debt Issued by Investment Funds

Structured Credit
July 06, 2022

DBRS Morningstar finalized its “Global Methodology for Rating Debt Issued by Investment Funds” (the Fund Methodology).

This methodology presents the criteria for which debt issued by investment fund ratings are assigned and/or monitored.

The methodology supersedes the prior version, which was titled “Global Methodology for Rating Secured Debt Issued by Funds,” published on June 1, 2021, and is effective as of July 6, 2022.

The changes to the Fund Methodology address the following concepts:
-- Expanding the methodology to assess both secured and unsecured debt;
-- Expanding the methodology to assess structurally subordinated debt issued by entities, such as feeder funds, that typically have recourse to the corporate debt investment and related cash flows only after the creditor claims at the main fund have been satisfied;
-- Including funds that offer limited redemption rights, such as interval funds, in addition to funds that do not provide for redemption rights;
-- Providing a framework for assessing perpetual or evergreen funds, which generally necessitate contemplation of refinancing debt.

There were no comments received during the request for comment period. As outlined in the press release dated May 19, 2022, DBRS Morningstar expects that the changes will not affect any fund ratings currently outstanding.

All comments received during the request for comment period have been published to the DBRS Morningstar website, except in cases where confidentiality is requested by the respondent.

Notes:
DBRS Morningstar methodologies are publicly available on its website www.dbrsmorningstar.com under Methodologies & Criteria.

For more information on this methodology or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.