Standard & Poor's yesterday introduced an enhanced version of RatingsDirect, its online credit rating and research tool.
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Users of RatingsDirect are able to access online the vast amount of research that the rating agency provides. The service offers information on nearly eight million ratings on approximately 40,000 corporate, sovereign, and municipal issuers worldwide, in addition to research and commentary published by the agency's analysts.
Users can view in real time rating actions taken on various credits for all fixed-income classes and compare various credits in a particular sector to glean relative strength. Users can also receive email alerts on certain credits based on the particular alert profile that the user sets.
The additions to the existing program largely address the service from a user's perspective and make cosmetic changes. The basic features remain the same, but the new service allows users to more easily tailor the information in ways that they were not able to before. For example, users can now set five unique alert profiles to track credit information on a more specific basis. In the past, users could only tailor one type of alert profile that would generate an email.
For public finance professionals, there are a few noteworthy innovations that could be useful in certain circumstances. For example, a new feature allows users to view the financial enhancement rating of an insurer in addition to its financial strength rating. The distinction is subtle, but may have some practical applications.
"The financial strength rating deals with the company's claims-paying resources. The financial enhancement rating includes those claims-paying resources but also adds the company's willingness to pay, so it measures the timeliness and willingness to make payments on certain credits," said Robert Partridge, managing director at Standard & Poor's.
The distinction between an insurer's FSR and FER is not particularly relevant for investors who own rated monoline-insured bonds since a monoline would almost never decline to make debt service payments in a default for fear of having its ratings cut or withdrawn, according to Standard & Poor's.
But the distinction is important for investors who are comparing one multi-line insurer to another, such as American International Group Inc. or Allstate Insurance Co., for example. If a multi-line insurer declined to pay debt service obligations in a default, its overall business would be less affected since it can insure multiple lines of business. For the investor who holds a bond that is enhanced by a multi-line insurer, the insurer's timeliness and willingness to make payments is particularly important since the multi-line insurer could have the option of delaying payment.
It is not clear if the enhanced service will cost more than the existing one since Standard & Poor's does not publicly comment on its pricing policies. (c) 2006 The Bond Buyer and SourceMedia, Inc. All rights reserved. http://www.bondbuyer.com http://www.sourcemedia.com
