DBRS Morningstar Proposes to Refine Long-Term Obligations Rating Scale

As part of its ongoing effort to bring further clarity and transparency to its ratings process, DBRS Morningstar has conducted a review of the Long-Term Obligations Rating Scale (the Scale) and is today requesting feedback on a proposal to refine two rating categories that are part of the Scale.

As announced in its September 16, 2019, ratings symbology review, DBRS Morningstar considered whether there is a meaningful difference in terms of relative or absolute credit risk between different rating subcategories within the following rating categories:

-- CC (i.e., between any of the following rating subcategories: CC (high), CC, and CC (low)
-- C (i.e., between any of the following rating subcategories: C (high), C, and C (low).

DBRS Morningstar determined there is no meaningful difference in terms of relative or absolute credit risk between these designations. As part of that process, DBRS Morningstar also sought feedback from external parties.

To date, we have not received external feedback related to these rating categories.

At this time, DBRS Morningstar proposes to retire the (high) and (low) designations within the CC and C rating categories. Following the adoption of the proposal, DBRS Morningstar will not use the rating levels with either (high) or (low) within the CC and C rating categories. Please see Exhibit 1 in the “Proposed Refinements to DBRS Morningstar Long-Term Obligations Rating Scale” appendix under Related Documents for an illustration of the proposed Scale and a summary of proposed refinements.

The proposal will have no impact on outstanding public DBRS Morningstar ratings and will not affect the existing mapping relationship between DBRS Morningstar rating scales, as described in “Short-Term and Long-Term Rating Relationships.” The proposed refinements to the Scale will impact a limited number of outstanding private DBRS Morningstar ratings, and DBRS Morningstar will communicate these refinements directly to those parties that engaged DBRS Morningstar to assign these credit ratings after the implementation of its proposal.

The proposed refinements to the Scale will also have no material impact on our RatingsNow distribution or any of our regulatory disclosures.

DBRS Morningstar welcomes feedback on the proposal by March 31, 2023, after which time, DBRS Morningstar will update its “Long-Term Obligations Rating Scale” policy.

Market participants may send their questions or comments to the following email address: proposal.feedback@dbrsmorningstar.com

Notes:
DBRS Morningstar may publish any comments or questions received except in cases where confidentiality is requested by the relevant market participant.

For information on DBRS Morningstar’s current rating symbols and rating scales, the mapping relationship between DBRS Morningstar’s short-term and long-term ratings, and related DBRS Morningstar policies and procedures, please visit the Understanding Ratings section of our website at https://www.dbrsmorningstar.com/understanding-ratings.

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