Fitch Ratings is launching a rating system for collateralized debt obligation managers, following a similar initiative launched at the end of last year by Standard & Poor's to better respond to increasing demand by investors for information regarding managers on specific transactions.
Said Rafat, senior director at Fitch, explained that the agency has not yet officially rated a manager but expects to issue ratings by the end of the first quarter. "In looking at our own surveillance data on CDOs, it is clear that the asset manager plays a significant role in performance," he said, explaining that Fitch has always accounted for managers in ratings, but has recently found a further correlation between particular managers and ratings action.
Fitch's rating system will detail nine categories, providing a rating for each. The nine categories include: company and management experience, financial condition, staffing, procedures and controls, credit underwriting/asset allocation, portfolio management, CDO administration, technology, and portfolio performance. Moody's Investors Service does not have plans for a manager specific product.