Fitch Ratings late Thursday provided an unsolicited preliminary assessment of a City Center Trust 2011-CCHP CMBS deal that differs in terms of investment grade ratings assigned to the most junior class of the transaction.
The deal is notable because it is one of the first floating-rate transaction of this type in several years, according to Fitch.
When asked about the ratings disagreement, Moody’s provided this publication with a provisional ratings report released Wednesday that shows it gave the class a low-end investment grade rating. (City Center Trust is a single loan transaction backed by a portfolio of hotel properties.)
Fitch said it had been asked to provide preliminary feedback on the transaction and found it would likely warrant no more than a speculative grade rating. It said it was ultimately asked not to rate the transaction.
When asked if the preliminary rating assessment differed beyond the most junior class, Eric Rothfeld, managing director, Fitch, told NMN, “The credit enhancement differential increased as we moved down the capital structure.”
Occasionally, but more frequently since the downturn, rating agencies have taken issue with each other’s ratings in moves commonly interpreted as having a competitive agenda but also potentially highlighting what otherwise might be less noticed risk factors.
Fitch said last year its policy is only to assign unsolicited ratings sparingly, typically where there is strong investor interest and it has a materially different credit opinion on a transaction compared to those expressed by other rating agencies.
When asked how frequently Fitch has released unsolicited ratings, a spokesman said that Fitch has only started doing so within the past year and this is only its third. He said this is the first unsolicited rating for this type of security.
