Nordic Credit Rating (NCR) today published final amendments to its short-term rating scale, which is part of its Rating Principles methodology (§14–17). The new scale aims to increase granularity in terms of short-term credit quality within rating levels. Specifically, the amendments aim to increase granularity in relation to investment grade issuers, which account for most outstanding short-term debt instruments in the Nordic markets.
Amendment summary
The amendments to the short-term rating scale entail:
- redefining the scale from 'N1' (highest) to 'N6' (lowest);
- mapping the scale to correlate with long-term rating levels;
- increasing the granularity of short-term ratings in respect of investment grade issuers; and
- increasing transparency in terms of how we assign short-term ratings.
Changes following request for comments
NCR received no comments on its proposal, but we have made some minor refinements. The final criteria differ slightly from the published proposal as follows:
- We have clarified that outlooks (which typically have a 12-18 month timeframe) are related to the long-term rating (§22).
Impact on published ratings
The amendments will result in new published short-term issuer ratings on all issuers, but will have no effect on any outstanding long-term issuer ratings or issue ratings. All issuer ratings and issue ratings have been placed Under Criteria Review (UCR) and assigned a 'UCR' identifier until new short-term issuer ratings are assigned. We aim to assign new short-term ratings and resolve the 'UCR' status of the ratings affected as soon as possible and no later than six months after publication of the methodology.
NCR's methodologies are available at:
https://nordiccreditrating.com/governance/methodologies.
This statement does not constitute a rating action.
Contacts:
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Mille Fjeldstad, analyst, mille.fjeldstad@nordiccreditrating.com