DBRS Morningstar Publishes Final Global Methodology for Rating Credit Tenant Leases

DBRS Morningstar finalized its “Global Methodology for Rating Credit Tenant Leases” (the Methodology).

The Methodology presents the criteria for which global credit tenant lease (CTL) credit ratings are assigned and/or monitored, including CTL transactions with more than one credit tenant and/or CTL transactions where the rated notes do not fully amortize during the corresponding lease terms for the credit tenant(s) (a single-asset/single-borrower quasi-CTL transaction).

The Methodology supersedes the appendix to the following methodologies published on the dates below:
-- “North American Single-Asset/Single-Borrower Ratings Methodology” (Appendix B—Credit Tenant Leases (CTLs)), published on February 23, 2023.
-- “European CMBS Rating and Surveillance Methodology” (Appendix G: Credit Tenant Leases), published on December 14, 2022.

Accordingly, DBRS Morningstar will subsequently withdraw and archive the appendices after all outstanding credit ratings have been updated.

The finalization of the Methodology follows the conclusion of the request for comment period that began on August 2, 2023. DBRS Morningstar received no comments during the request for comment period. The Methodology is effective as of October 11, 2023.

Based on DBRS Morningstar’s preliminary impact analysis, no outstanding credit ratings are expected to change solely as a result of the globalization of the Methodology. All credit ratings are subject to surveillance, which includes review of updated performance metrics and relevant credit factors.

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:
The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

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 [email protected]

DBRS Morningstar finalized its “Global Methodology for Rating Credit Tenant Leases” (the Methodology).

The Methodology presents the criteria for which global credit tenant lease (CTL) credit ratings are assigned and/or monitored, including CTL transactions with more than one credit tenant and/or CTL transactions where the rated notes do not fully amortize during the corresponding lease terms for the credit tenant(s) (a single-asset/single-borrower quasi-CTL transaction).

The Methodology supersedes the appendix to the following methodologies published on the dates below:
-- “North American Single-Asset/Single-Borrower Ratings Methodology” (Appendix B—Credit Tenant Leases (CTLs)), published on February 23, 2023.
-- “European CMBS Rating and Surveillance Methodology” (Appendix G: Credit Tenant Leases), published on December 14, 2022.

Accordingly, DBRS Morningstar will subsequently withdraw and archive the appendices after all outstanding credit ratings have been updated.

The finalization of the Methodology follows the conclusion of the request for comment period that began on August 2, 2023. DBRS Morningstar received no comments during the request for comment period. The Methodology is effective as of October 11, 2023.

Based on DBRS Morningstar’s preliminary impact analysis, no outstanding credit ratings are expected to change solely as a result of the globalization of the Methodology. All credit ratings are subject to surveillance, which includes review of updated performance metrics and relevant credit factors.

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:
The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

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 [email protected]