Standard & Poor’s Ratings Services sent letters to rated bond issuers earlier this month demanding that they provide all information on private debt, including loans. The ratings firm said it would withdraw its ratings from companies that refused to comply.
According to a client update by attorney Namita Tripathi Shah of Day Pitney LLP, S&P wants disclosure of direct bank and private loans, including private placements, even if the debt is not rated by S&P.
The rating firm has asked for all relevant documentation, including the form of note or bond, loan or financing agreement, covenant agreement and security documentation. It wants the information as soon as possible after closing a transaction, but would prefer to get it prior to closing where possible.
Shah writes that bondholders have also asked issuers to disclose information about bank loans and other private debt on the Electronic Municipal Market Access site, maintained by the MSRB. The MSRB encouraged but did not require issuers to do so in 2012.