Fitch Ratings will host a teleconference this morning at 15:15BST/10:15EDT to discuss the agency's proposals to increase transparency regarding the retention of the economic risk of the equity piece in Fitch-rated structured finance transactions.
On 24 June, Fitch announced that it is seeking comments regarding its proposals to invite transaction originators, sponsors, servicers and asset managers to disclose whether they retain the economic risk of the equity piece (or first loss piece) in Fitch-rated structured finance transactions in which they are a transaction party.
'In making this proposal, Fitch is not advocating retaining the risk as a preferable model over it being transferred to a third party. Indeed, there are clear potential conflicts of interest that arise when the equity risk is either retained or not retained that could adversely impact bond performance for noteholders. For this reason, Fitch does not currently make specific analytical adjustments with respect to retention or non-retention,' says Stuart Jennings, EMEA Structured Finance Risk Officer at Fitch. 'The intention of the initiative is to allow for more disclosure and information such that investors can make an informed decision and form their own view on whether this issue impacts their investment decisions and assessment of performance.'
An exposure draft outlining the proposal in more detail, entitled 'Retaining Equity Piece Risk - Enhancing Transparency', is available on the agency's website, www.fitchratings.com.
The agency is seeking feedback regarding its proposal. Any comments should be sent to sffeedback@fitchratings.com by 1 August 2008.
Participants can email questions prior to the call to rachel.cros@fitchratings.com.
To listen to the call, participants should dial one of the following numbers:
UK/Europe: +44 (0) 1452 555 566 UK Toll
US: +1 866 966 9439 USA Toll Free
Conference ID: 56924780
Replay (available two hours after the end of call and until midnight on 24 July 2008):
International: +44 (0) 1452 550 000 (UK Toll)
US Toll Free: 1 866 247 4222
Australia Toll Free: 1 800 613 774
Hong Kong Toll Free: 8009 013 93
Singapore Toll Free: 8004 411 242
Passcode: 56924780#
A replay of the call will also be available on the Fitch website, www.fitchratings.com, under Resource Library/Teleconferences/Events.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contacts:
Karen Skinner, +44 20 7417 6274 (London)
Stuart
Jennings, +44 20 7417 6271
Glenn Costello, 212-908-0307 (New York)
Marjan
van der Weijden, +65 6796 7226 (Singapore)
Media Relations:
Julian
Dennison, +44 020 7682 7480 (London)
Sandro Scenga, 212-908-0278
(New York)
