Moody's withdraws CDPC rating

By Michael Peterson

Tuesday, February 03, 2009

Moody's has withdrawn the rating of a credit derivative product company that was set up in 2007 to sell protection on single names and tranches

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Comment by: Anonymous. Posted 15 years ago [2009-02-06 10:05:34]

It appears to me these companies (now three) are withdrawing the rating, not the other way around... what does this really say?

Comment by: Anonymous. Posted 15 years ago [2009-02-05 19:54:25]

I'm guessing that this won't be the last CDPC rating that Moody's withdraws this year.

Comment by: Anonymous. Posted 15 years ago [2009-02-04 18:25:23]

I think the whole rating system/methodologyies should incorporate tail events. So far none of the agencies have incorporated this, which should be of a concern, especially if the market innovate "new products" .

Comment by: Anonymous. Posted 15 years ago [2009-02-04 11:50:38]

Your question below is valid in that getting the market to innovate (now a bad word) and expand would only faciliate credit risk price discovery and meet risk transfer/capital needs. Both will be required to get banks lending to corporates again which should be a top priority.

Comment by: Anonymous. Posted 15 years ago [2009-02-04 11:39:27]

It demonstrates that market participants are now looking closer into the products and counterparties involved, which is a good thing. The reliance of investors purely on ratings was also not desirable. Of course, this is easier in a market that is not expanding or even stagnant. The question is what will happen if, one day, markets expand and innovate again?

Comment by: Anonymous. Posted 15 years ago [2009-02-04 08:52:41]

This is a non-event... to the extent that banks get comfortable with counterparty risk, they do so less on the ratings on the tin and rely more on modelling the underlying portfolio amassed by the vehicle and assigning a pD & risky curve for the counterparty. Ratings will be less relied on in the future; whether it be to buy a bond or transact with counterparties. Perhaps that is a good thing.

CLOs

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