Since that event last July, no issuer has hired S&P to rate any of multiloan CMBS deals, which have typically been $1 billion in size. More than $12 billion in CMBS have been sold this year.Payback hurts, doesn't it. We have not analyzed the proposed changes, but we have to assume that they are doing more than just calling all the new loans "crap", as an S&P analyst was quoted saying back in February 2011, just 4 months before the ratings firm was essentially blocked from all new issue deals.
My favorite quote is:
Harris Trifon, a CMBS strategist at Deutsche Bank, said that "at first glance, it seems the magnitude of the changes will disappoint most investors."They fail to mention that he is a former S&P analyst. He's a nice guy, and he's probably right - heck, he probably knows more about S&P than just about anyone in a research group on the Street - but it just seems like WSJ would disclose that, right?
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S&P tried to get honest and it didn't pay so now under a new guy from left field, Peter Eastham who knows nothing about CMBS, they want to compete with the 12 other ratings agencies who are willing to rate new cmbs, including DBRS. This can not end well.
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