JCR started to indicate rating outlook to all long term senior debts ratings and ratings on ability to pay insurance claims of insurers, and designate rating direction to Credit Monitor. For all ratings to be assigned or reviewed from now, following measures are taken.
(1) Indication of Rating Outlook
In principle, JCR indicates Rating Outlooks (Positive, Stable, Negative, Developing, or Multiple) to all long-term senior debts ratings and ratings on ability to pay insurance claims of insurers.
(2) Assignment of long-term senior debts ratings
In principle, JCR assigns long-term senior debts ratings to all issuers of long-term bonds/notes, shelf registration or MTNs which it rates.
(3) Designation of direction to Credit Monitor
JCR designates rating direction (Positive, Negative, or Developing) to Credit Monitor placed on ratings.
Rating Outlooks:
Rating outlook is JCR's opinion regarding the likely direction of a rating over the medium term. Rating outlooks fall into the following five categories: Positive, Negative, Stable, Developing, and Multiple. Positive means that a rating may be raised, while Negative means that a rating may be lowered. Stable means that a rating is not likely to change. In the few instances, Developing or Multiple outlook is assigned. Developing means a rating may be raised or lowered, contingent upon an event. Multiple means that an issuer has multiple outlooks for its individual ratings, in which case JCR will describe any differences and provide the rationale for these differences in its news release.
On April 9, 2001, JCR introduced Rating Outlook to be indicated to sovereign ratings and non-resident quasi-sovereign ratings. This time, JCR widens the coverage of Rating Outlook designation, and starts designating them to all long-term senior debts ratings and ratings on ability to pay insurance claims of insurers in principle.
Long-term Senior Debts Ratings:
Long-term senior debts rating is an opinion of an obligor (issuer)'s financial capacity to pay its overall financial obligations. It would differ from the rating on any specific financial obligation which takes into account the nature and provisions of the obligation and its senior/subordinate status, as well as its standing in bankruptcy or liquidation.
In principle, JCR assigns long-term senior debts ratings to all issuers of long-term bonds/notes, shelf registration or MTNs (excluding structured bonds/notes) which it rates.
Direction of Credit Monitor:
When such an event occurs as an outbreak of war; a serious accident, lawsuit, or administrative action; a substantial change in business performance; or a proposed merger that may necessitate a rating change, JCR will initiate, at any time, a reviewing procedure for the rating and will announce publicly that the rating is placed under Credit Monitor. A rating under Credit Monitor is shown with '#' placed before the rating symbol. JCR designates direction to Credit Monitor placed on ratings. The direction (Positive, Negative, or Developing) shows JCR's opinion regarding the likely direction of a rating placed under Credit Monitor.
Rating Outlooks and rating revisions:
A positive or negative Rating Outlook or Direction of Credit Monitor does not imply a rating change is inevitable. At the same time, ratings with Stable outlooks could be upgraded or downgraded before an outlook moves to positive or negative or they are placed under Credit Monitor.
