DBRS Morningstar Provides an Update on the Proposed Refinements to Certain Rating Scales

On January 27, 2023, DBRS Morningstar requested feedback on its proposal to refine its Long-Term Obligations Rating Scale. To date, DBRS Morningstar has not received external feedback on the proposal, and will be moving forward with the proposed refinements to the Long-Term Obligations Rating Scale.

In addition, DBRS Morningstar identified two additional rating scales, the Credit Fund Rating Scale and the Expected Loss Rating Scale, where we have similarly determined there is no meaningful difference in terms of relative or absolute credit risk or credit quality, as applicable, between the following rating subcategories:

-- 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)).

At this time, DBRS Morningstar proposes to retire the (high) and (low) designations within the CC and C rating categories in each of the Credit Fund Rating Scale and the Expected Loss Rating Scale. 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 in these scales. Please see Exhibits 1 and 2 in the “Proposed Refinements to DBRS Morningstar’s Credit Fund Rating Scale and Expected Loss Rating Scale” appendix under Related Documents for an illustration of the proposed scales and a summary of proposed refinements to the Credit Fund Rating Scale and Expected Loss Rating Scale, respectively.

The proposal will have no impact on outstanding public or private DBRS Morningstar ratings expressed in the Credit Fund Rating Scale or Expected Loss Rating Scale.

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

DBRS Morningstar welcomes feedback on the additional proposal by April 28, after which time, DBRS Morningstar will update the Long-Term Obligations Rating Scale, the Credit Fund Rating Scale, and the Expected Loss Rating Scale.

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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