Rating disparity shows importance of own analysis

Disparities between Moody’s and Standard & Poor’s in their assessment of loss risks in cover pools should dissuade investors from relying on just one rating agency for an understanding of a pool’s underlying strength, said Commerzbank research this week. And with the sub triple A covered bond market set to grow, investors may already be more inclined to scrutinise ratings more closely, and rather than treat them as a mark of quality, rely more on their own analysis instead.