DBRS Releases Final Methodology for Rating U.S. CFOs Backed by Private Equity

DBRS, Inc. (DBRS) has today released a final version of its methodology used to rate and monitor U.S. collateralized fund obligations (CFOs) backed by private equity (PE). The final methodology does not have any substantive changes from the proposed methodology published on August 20, 2012 as a request for comment.

The methodology is intended to be used for CFOs backed primarily by limited partnerships in venture capital and leveraged buyout PE funds. Underlying assets covered by this methodology would be primarily focused on U.S. companies, although buckets for other jurisdictions could be considered. The focus of this methodology will be on static pools of seasoned funds.

The methodology makes use of the net asset values of the underlying funds to forecast cashflows on the pool, which are then run through a DBRS proprietary cashflow model. In addition, DBRS will perform operational reviews of certain counterparties and a legal analysis of transaction documentation.

DBRS criteria and methodologies are publicly available on its website www.dbrs.com under Methodologies.

DBRS's rating definitions and the terms of use of such ratings are available at www.dbrs.com.