DBRS Publishes Updated Capital Goods Dealership Methodology

DBRS published an updated version of its “Rating Companies in the Capital Goods Dealership Industry” methodology (the Methodology).

DBRS has conducted a periodic review of the Methodology. This update supersedes the previous version published in May 2018 and is effective as of May 10, 2019. While the updated Methodology presents a reorganized analytical approach that includes an “Overlay Factors” section, DBRS deems the update not to be material and has determined that no ratings are expected to change as a result of this update.

With the publication of the Methodology, DBRS has changed the format of its corporate methodologies to enhance transparency in its standard analytical process. DBRS methodologies now include overlay factors, consisting of sector-specific overlays and general overlays, the latter of which will eventually be common to all traditional corporate sectors (not including public finance, infrastructure finance or project finance). The business risk assessment (BRA) and financial risk assessment will now blend into a core assessment, which will then be adjusted, as needed, for specific and general overlay factors to determine the issuer rating. What used to be referred to as additional BRA factors as well as sovereign risk and corporate governance are now included as overlay factors.

DBRS believes that addressing adjustments for industry-specific and general overlay factors at the end of the process will improve the transparency of these adjustments compared with additional BRA factors, for example, which only factored into the determination of the BRA. Over the next year, as corporate methodologies are updated, the layout of each will change to this overlay factor format.

Notes:
DBRS methodologies are publicly available on its website www.dbrs.com under Methodologies & Criteria.

For more information on this methodology or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.