NEW YORK--(BUSINESS WIRE)--Fitch Ratings today published an updated criteria report that focuses on Fitch's methodology for analyzing the credit risk of mortgage real estate investment trusts (REITs) that own direct or indirect interests in mortgages on real estate or other interests in real property. The report, titled 'Criteria for Rating U.S. Mortgage REITs and Similar Finance Companies,' updates and replaces a report of the same title dated Feb. 26, 2013.
Fitch's credit ratings for mortgage REITs are based on qualitative factors such as the company's business model, servicing capabilities, asset quality, management and governance, track record, and operating history. Quantitative factors include funding options, funding diversity, leverage and capitalization, unencumbered asset coverage, capital market access, dividend payout ratios, and operating performance.
Funding diversity and financing strategy, liquidity, and unencumbered asset quality are typically major obstacles in a mortgage's progression toward achieving investment-grade ratings. Mortgage REITs typically have a soft cap at the 'BBB' rating category.
The full report is available on Fitch's web site at 'www.fitchratings.com', or by clicking on the link.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Jan. 31, 2014);
--'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis' (Dec. 23, 2013);
--'Criteria for Rating U.S. Equity REITs and REOCs' (Feb. 26, 2013).
Applicable Criteria and Related Research: Criteria for Rating U.S. Mortgage REITs and Similar
Criteria for Rating U.S. Equity REITs and REOCs
Treatment and Notching of Hybrids in Non-Financial Corporate and REIT Credit Analysis
Global Financial Institutions Rating Criteria