Nordic Credit Rating (NCR) today published its proposed amendments to its short-term rating scale, which is part of its Rating Principles methodology (§14–17). The proposal aims to increase granularity for short-term credit quality within rating levels. The purpose of these amendments is to make short-term ratings more transparent and relevant for issuers with NCR credit ratings and to align our short-term rating scale with our long-term rating scale. NCR's proposal aims, in particular, to increase granularity for investment grade issuers, which account for the majority of outstanding short-term debt instruments in the Nordic market.
We are requesting comments on the proposed amendments and encourage interested parties to provide direct feedback via criteria@nordiccreditrating.com by 5 May 2022. We will review all comments received, with the intention of publishing an anonymised summary of comments and the final criteria once complete.
Amendment summary
The proposed amendments to the short-term rating scale entail:
- redefining the short-term rating scale from 'N1' to 'N6';
- mapping the short-term rating scale to correlate with long-term rating levels;
- increasing the granularity of short-term ratings for investment grade issuers; and
- increasing the transparency of how we assign short-term ratings.
Impact on published ratings
The amendments will result in new published short-term issuer ratings for all issuers, but will have no effect on any outstanding long-term issuer ratings or issue ratings. All issuers will be placed on Under Criteria Review (UCR) and assigned a 'UCR' identifier to reflect the proposed changes to short-term issuer ratings. All ratings placed on 'UCR' will be reviewed as soon as possible and no later than six months after publication of the methodology.
Contacts:
Mille Fjeldstad, analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com