Tougher Rules on ABCP Rating

Dominion Bond Rating Service, the agency that gave top ratings to issuers of ABCP in Canada, announced that issuers of ABCP will now be required to have "global-style liquidity", meaning the providers have to support the papers in case of ugly market events. This was the original reason that the Canadian ABCP market totally shut down, because bankers which were required to provide emergency support in the case of a "market disruption" did not. The term "disruption" had never been defined, therefore the banks jumped out of the deal and $35B went unpaid. Until yesterday, DBRS was still maintaining its old position that the previous terms and conditions were sufficient, when clearly they were not.

Ref. http://tinyurl.com/33evfs