S&P Seeks Input on Credit Stability Proposal

Standard & Poor's Ratings Services is requesting comments on a proposal to incorporate credit stability as an important factor in its ratings. S&P said the purpose of the proposal is to more closely align the meanings of its ratings with its "perception of investors' desires and expectations" in the wake of the greater volatility recently displayed by certain derivative securities. "Under the proposal, when assigning and monitoring ratings, we would consider whether we believe an issuer or security has a high likelihood of experiencing unusually large adverse changes in credit quality under conditions of moderate stress," said Mark Adelson, managing director and chief credit officer at S&P. The rating agency said it expects the proposed change to have little, if any, effect on corporate and government ratings but a greater effect on certain areas of structured finance, especially derivatives. If adopted, the change would be implemented over a period of about six months, Mr. Adelson said. Responses are requested by Aug. 6. S&P can be found online at http://www.standardandpoors.com.