Which of the following is a general problem associated with external credit enhancements? External credit enhancements:
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A) |
are very long-term agreements and are therefore relatively expensive. | |
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B) |
are subject to the credit risk of the third-party guarantor. | |
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C) |
are only available on a short-term basis. | |
According to the “weak link” philosophy adopted by rating agencies, the credit quality of an issue can not be higher than the credit rating of the third-party guarantor. Along these lines, if the guarantor is downgraded, the issue itself could be subject to downgrade even if the structure is performing as expected. | 
发表于 2010-4-24 22:16
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