... entity (PSE) criteria focus on the likelihood of extraordinary support from a government to an entity in financial distress. Fitch follows a top- down ratings approach from the sponsor's rating or bottom-up approach from the standalone profile of the PSE, depending on the link with the sponsor. Not Profit Focused: PSEs in key social sectors normally do not aim for profit maximisation. In some cases they are recipients of government funding through transfers and/or subsidies, capital injections, below-market-rate funding or co-funding of capital expenditure. The aim of these PSEs is to provide an important service and not to maximise returns. Five Rating Factors: Fitch's PSE criteria assess five main factors to determine the notching for dependent entities: legal status; control; financial integration; ability; and strategic importance. Although some factors have a greater weight in the criteria than others (eg control plays a key role in...
