Capital MarketsTalking Shop

Talking Shop: Yes or No When Moody’s Asks for Dealer Agreements?

By February 23, 2021No Comments

Member question: “Moody’s is asking us to provide our dealer agreements for our commercial paper program. Historically we have not provided private agreements. Are you seeing this also and if so, are you providing the agreements?

  • “For what it’s worth, Moody’s is saying they want it to see the settlement period language in the document. We have provided the private placement memorandum which contains the binding settlement language.
  • “We have not provided the dealer agreement and are pushing back on the basis it is a confidential bilateral agreement. But curious to know if we are a total outlier here.”

Peer answer 1: “We have not provided, but would have no concerns. I suppose the reason for asking is more or less to ensure that there’s actually an agreement in place, versus the agency wanting to diligence any of the specific features in the contract. If we were asked to provide it, we’d probably make the agency explain why they needed to see it, just from a ‘less is more’ principle.”

Peer answer 2: “​We received the request and provided. When I was with a previous company, this had been requested years back and always provided. I believe it’s to support the short-term rating.”

Peer answer 3: “They reached out to us requesting this information [last fall]. We provided the agreements to them.”

Peer answer 4: “We have not been asked for them. Did they say why they were looking for them or what they were looking for?”

A spokeswoman said Moody’s declined to comment on dealer agreements. If you have answers or comments on anything you read in Talking Shop, please send them to insights@neugroup.com.

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Justin Jones

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