...Fitch Ratings has updated its methodology for rating portfolios of corporate debt. This criteria update includes a number of material changes that are designed to challenge existing CDO rating assumptions, address areas of CDO un derperformance, and fully incorporate Fitch s most up\##to\##date views of corporate credit risk (especially addressing those risk factors in corporate portfolios that have increased in recent years). A fundamental tenet of corporate CDOs is that, by pooling corporate risk into asset pools, investors could benefit from diversification. Over time, however, Fitch has observed an increase in the level of concentration risk in many CDO portfolios, which may increase the likelihood that a particular portfolio will exhibit default and loss rates that are inconsistent with long\##term observed average statistics. Additionally, uneven portfolio compositions and risks from single obligor concentrations can result in ...

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 Fitch Research
Fitch Ratings is a leading global rating agency committed to providing the world's credit markets with independent, timely and prospective credit opinions. Built on a foundation of organic growth and strategic acquisitions, Fitch Ratings has grown rapidly during the past decade gaining market presence throughout the world and across all fixed income markets.