The proposed updated methodology can be downloaded here.

The CRE loan and CMBS Rating Methodology supplements the General Structured Finance Rating Methodology and should be read together with the Counterparty Risk Methodology.

Summary of the proposed key changes

This proposed update includes the following adjustments:

1. A clarification of how we incorporate sponsor and business plan analysis into the rating process
    
2. Aligns our liquidity coverage expectations with the General Structured Finance Rating Methodology
    
3. Updates to our rating conditional rental value haircuts and discount rates approaches
    
4. A clarification of our vacancy assumptions
    
5. A clarification of our foreclosure assumptions for CMBS
    
6. A clarification of how we capture ESG risks in our ratings
    
7. Amendments to our CRE loan and CMBS data guidelines
    
8. Editorial changes

The proposed changes are expected to affect two existing ratings assigned by Scope in a range of up to two notches on the upside and up to two notches on the downside.

Call for comments

Scope invites issuers, investors, and other interested parties to comment on the methodology by 4 December 2024 as part of the agency’s ongoing commitment to transparency and an open dialogue with market participants.

Scope will review and publish the content of written responses in accordance with regulatory requirements unless the respondent has specifically requested confidentiality.

Please send your comments to consultation@scoperatings.com.