Now that the Dodd-Frank bill has been signed into law, issuers of asset-back bonds are required to disclose their credit rankings in their regulatory filings. Credit rating agencies like Moody’s are not happy about this because it subjects them to expert liability , “meaning that they would face the same legal risks as accountants and other parties that participate in bond sales.” Issuers were not able to obtain ratings for inclusion in their flings wit the SEC so the SEC granted issuers a waiver for six months which allows time for implementation of the law.
The article briefly mentions that issuers will consider an alternatives to this a law by using Rule 144a but doesn’t adequately explain what 144a is. A good explanation of 144a is here.
