KBRA Releases Research – Unpublished Ratings: Same Standards, Different Distribution

NEW YORK--(BUSINESS WIRE)--As the private markets continue to expand their use of investment grade fixed income instruments, regulators and other market participants have shown increasing interest in private ratings (also referred to as unpublished ratings). This increased focus has raised questions about how private ratings are developed and whether they differ from public credit ratings in terms of analytical rigor or oversight.

At KBRA, published and unpublished credit ratings are produced under the same analytical standards, methodologies, controls, and disclosures. The only distinction lies in dissemination. For public credit ratings, KBRA posts the rating and related publications on its website. For unpublished (private) ratings, we distribute the rating and associated reports to the engaging entity through a virtual data room.

All Ratings Subject to Same Methodologies & Analytical Processes

KBRA uses a consistent and well-defined rating process for all credit ratings—whether published or unpublished. This process begins with the application of publicly available methodologies, which are approved by the firm’s Credit Policy Committee, reviewed annually, and subject to Board-level oversight. These methodologies are also exposed for public comment prior to implementation or the effectuation of material changes, reinforcing market understanding, transparency, and methodological consistency across KBRA’s ratings.

The analytical rigor applied to unpublished ratings is identical to that applied to published ratings. Crucially, all ratings are assigned through formal rating committees composed of trained and tested voting members, with chairs subject to additional qualification standards. The committee structure ensures that ratings reflect a collective, disciplined judgment rather than the view of any single analyst, reinforcing independence across KBRA’s rated universe. Both published and unpublished ratings rely on the same analytical staff, who bring a wide range of experience from across the financial services ecosystem, including prior roles at rating agencies, investment firms, regulatory bodies, and legal institutions. Analysts conduct comprehensive reviews as part of the analytical process incorporating qualitative inputs such as management reviews, detailed evaluations of transaction documents and legal opinions, as well as both issuer-provided and third-party data. Every new rating is accompanied by a credit rating report that details KBRA’s credit opinion and the key analytical considerations underlying the rating. The same is true for subsequent surveillance reports.

Importantly, the decision to designate a rating as unpublished is made by the engaging entity, not KBRA. KBRA’s role is limited to producing an independent credit opinion using its established processes and standards. Whether that opinion is disseminated publicly or maintained privately does not affect the methodology, analytical approach, or governance applied in arriving at the rating opinion.

Ongoing Surveillance and Monitoring

Ongoing surveillance further underscores the parity between unpublished and published ratings. All ratings are subject to ongoing monitoring. If surveillance does not result in a rating change, the ratings are reviewed at least annually and explicitly affirmed, upgraded, or downgraded. Surveillance activities include periodic reviews of performance data, reassessments of key risk factors, and updates based on relevant new information. This process helps to ensure that ratings remain current and continue to reflect evolving credit conditions, regardless of publication status.

Performance

KBRA annually publishes its Global Rating Stability and Transition Study, which analyzes both published and private credit ratings using the same rating scale.¹ The report indicates stable rating performance across KBRA’s ratings universe.² In addition, KBRA’s topical research for the Structured Finance sector indicates that unpublished ratings have demonstrated stable performance in a manner consistent with KBRA’s rating definitions. These findings are consistent with expectations, as private ratings are assigned, monitored, and maintained using the same methodologies, analytical teams, governance framework, and rating processes as published ratings.^{3, 4}

Related Reports

¹ Long-Term Credit Ratings

² KBRA Global Rating Stability and Transition Study: 2011-2025

³ Private Credit SF: How KBRA Ratings Stack Up

⁴ Private Credit ABS Volume Continues at Healthy Clip

Click here to view the report.

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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