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SCOPE AND OVERVIEW
This methodology outlines S&P Global (China) Ratings’ methodology for rating structured finance securities (securitizations). This methodology applies to all securitization asset classes that we deem appropriate, and the different analytical techniques outlined in this methodology may apply to one or more different asset classes as we deem appropriate. Additional analytical techniques may also be adopted as we deem necessary for specific underlying assets or a given transaction type.
This methodology describes the approaches we use to determine the issue ratings typically assigned to securitization transactions. This methodology provides our approach to the fundamental analysis of securitization credit risks and the associated structural and cash flow considerations.
The analytic framework for securitization ratings typically includes the assessment of the aspects outlined below. These factors tend to be fundamental to most securitization transactions, however certain transaction types or structures may have features or conditions present that may require additional levels of alternative analysis, or may not require a detailed consideration of all of the below areas:
- Credit quality of the securitized assets;
- Legal and regulatory risks;
- Payment structure and cash flow mechanics;
- Operational and administrative risks; and
- Counterparty risk.