NEW YORK, Sept. 15, 2017 — Morningstar Credit Ratings, LLC, a nationally recognized statistical ratings organization (NRSRO), today announced the launch of its Real Estate Investment Trust (REIT) ratings initiative with the publishing of its U.S. REIT Credit Rating Methodology and the release of unsolicited ratings on an initial group of REITs. Morningstar is planning to rate approximately 40 of the largest and most frequent issuers of REIT senior unsecured debt by year-end.
The new rating services are available to REITs seeking an NRSRO rating, or REITs requiring an NRSRO rating for a security offering. The U.S. REIT Credit Rating Methodology and initial group of REIT ratings can be viewed on the Morningstar Credit Ratings website at www.morningstarcreditratings.com.
“We have heard repeatedly from investors and corporate issuers, including REITs, that there is a need for a fresh approach, greater transparency of the ratings process, and better client service from ratings agencies,” said Vickie Tillman, president of Morningstar Credit Ratings. “Our forward-looking approach to rating corporate credit and our deep expertise in analyzing commercial real estate, make the REIT market a natural extension of our strong analytical capabilities.”
Morningstar’s REIT methodology incorporates a balance of factors which consider both historical and, based on its expertise, prospective elements of REIT credit profiles. These include inherent business risks and the ability of cash flow to meet obligations, as well as quantitative elements based both on back-testing of financials as well as market pricing data. Morningstar’s methodology provides flexibility for its experienced analytical team to adjust on a case-by-case basis when warranted.
Morningstar’s REIT team is led by vice presidents Chris Wimmer and Mike Magerman, located in New York and Horsham, Pa, respectively, who each have at least 20 years of experience covering REITs and commercial real estate. They are part of the 19-member corporate credit and financial institutions rating team based in Chicago and report to senior vice president Rick Tauber and managing director David Sekera. Morningstar plans to expand the REIT team to support the growth of the ratings business in the REIT sector. The REIT team will draw from the expertise of Morningstar’s Commercial Mortgage-Backed Securities(CMBS) ratings team who have been analyzing commercial real estate since 2001.
Morningstar Credit Ratings received its Corporate and Financial Institution designation, which covers REITs, from the U.S. Securities and Exchange Commission (SEC) in late 2016, and was recognized as an approved NRSRO for corporate and financial institution ratings by the National Association of Insurance Commissioners (NAIC) in February 2017.
Morningstar Credit Ratings provides credit ratings services for CMBS, RMBS, agency credit risk transfer securities, single-family rental securities, ABS, CLO, corporate securities, financial institutions, and REITs.
More information about Morningstar Credit Ratings is available at www.morningstarcreditratings.com.
About Morningstar Credit Ratings, LLC and Morningstar, Inc.
Morningstar Credit Ratings, LLC is a nationally recognized statistical rating organization (NRSRO) offering a wide array of services including new-issue ratings and analysis, operational risk assessments, surveillance services, data, and technology solutions. Morningstar Credit Ratings, LLC is a subsidiary of Morningstar, Inc. (Nasdaq: MORN).
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $200 billion in assets under advisement and management as of June 30, 2017. The company has operations in 27 countries.