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 email@example.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.
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.