Rating Agencies Seek Comments

Moody's Investors Service and Standard & Poor's have separately released requests for comment on their respective rating processes in response to the unexpectedly high loss rates on subprime residential mortgage-backed securities, with the former considering, among other things, a new ratings scale for structured product. The new ratings scale is one thing "some public authorities and market participants have called for," Moody's said in its request for comment, citing as an example of how this might be done numerical rankings of 1-21 that "would probably map to corporate ratings." Meanwhile, S&P has requested further comments from market participants on a proposal that would require RMBS issuers to provide "additional loan-level origination variables and data at the time of initial securitization."