Issuers hit by US rating agency rule

Author: Nicholas Pettifer | Published: 3 Jun 2010
New rules for rating agencies in the US will add uncertainty to deals, increase costs for issuers and threaten the revival of structured finance

The Securities and Exchange Commission’s (SEC) amended rule 17g-5 came into force yesterday and it requires rating agencies to ask structured finance issuers in the US to disclose information that can be used to rate deals.

The idea is to give smaller rating agencies the opportunity to rate deals themselves, create more competition and foster more accountability from the deal’s original rating agency.

But issuers...