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A forward-looking opinion about a fixed-income fund’s capacity to maintain stable principal (net asset value).

A Principal Stability Fund Rating, also known as a "money market fund rating," is a forward-looking opinion about a fixed-income fund's capacity to maintain stable principal (net asset value). When assigning a principal stability rating to a fund, our analysis focuses primarily on the creditworthiness of the fund's investments and counterparties, and also its investments maturity structure and management's ability and policies to maintain the fund's stable net asset value. Principal Stability Fund Ratings are assigned to funds that seek to maintain a stable or an accumulating net asset value.

Generally, when faced with an unanticipated level of redemption requests during periods of high market stress, the manager of any fund may suspend redemptions for up to five business days or meet redemption requests with payments in-kind in lieu of cash. A temporary suspension of redemptions or meeting redemption requests with distributions in-kind does not constitute a failure to maintain stable net asset values. However, higher-rated funds are expected to have stronger capacities to pay investor redemptions in cash during times of high market stress because they generally comprise shorter maturity and higher quality investments.

Principal Stability Fund Ratings, or money market fund ratings, are identified by the 'm' suffix (e.g.,'AAAm') to distinguish the principal stability rating from a S&P Global Ratings traditional issue or issuer credit rating. A traditional issue or issuer credit rating reflects our view of a borrower's ability to meet its financial obligations in full and on time. Principal Stability Fund Ratings are not commentaries on yield levels.

23 June 2016 | Fixed-Income Funds: Principal Stability Fund Rating Methodology

Principal Stability Fund Ratings May Help Your Principal Stability Risk Assessment

The stability of principal is an essential part of the analysis of short-term liquidity funds risk. Our Principal Stability Fund Ratings provide an independent opinion about a fixed-income fund's capacity to maintain stable principal (net asset value).

Robust and Transparent Methodology and Long Track Record
We have been rating money market funds on our Principal Stability Fund Rating scale worldwide since 1984 and are one of the leading rating agencies in this sector. By using our Principal Stability Fund Ratings to supplement your analysis when selecting a money market fund, you can benefit from:
  • An independent opinion of the risks that could affect stability of principal;
  • A robust, transparent methodology focused on factors that affect the fund's net asset value, including credit, counterparty, interest-rate and liquidity risks;
  • Annual review meetings with our fund ratings analytical team;
  • Weekly monitoring of a fund's holdings as part of the ratings surveillance process, and
  • An easily understood rating scale.

Sample Criteria for 'AAAm' Rating
  • Underlying investments have the highest ratings from S&P Global Ratings (minimum 50% short-term rating of 'A-1+' and the remainder 'A-1').
  • The fund is managed to have a very low sensitivity to interest-rate risks with a weighted average maturity (WAM) limited to a maximum of 60 days, and a maximum weighted average maturity to final WAM(F) of 90 -120 days.
  • Weekly monitoring of fund holdings by a dedicated surveillance team as part of the rating surveillance process.

30-April-2019: How Has The Change In EU Regulation Affected Rated Money Market Funds?

21-Jan-2019: EU-Domiciled Money Market Funds Still Scrambling For Regulatory Approval Following Reforms

01-Oct-2018: Three Credit Suisse Money Market Funds Assigned Fund Credit Quality Ratings And Volatility Ratings

30-July-2018: The Secured Overnight Financing Rate (SOFR) Is Consistent With Our Principal Stability Fund Ratings Criteria

09-Aug-2017: How Uncertainty In Global Markets Affected 'AAAm' Rated Money Market Funds

31-May-2017: EU Money Market Reform: The Wait Is Finally Over

12-October-2016: Ratings On Money Market Funds Are Likely To Remain Stable After The SEC's New Amendments Take Effect

21-Jun-2016: How Liquidity Risk Factors Into Money Market Fund Ratings

21-Jun-2016: Will SEC Rule Changes Affect Our Ratings On Money Market Funds?

3-Dec-2015: Identifying The Shifting Sands For Money Market Funds In 2016

17-Sept-2015: S&P Global Ratings Adds Frequently Asked Questions Section To Principal Stability Fund Ratings Criteria

10-Sept-2015: What The Evolving Regulatory Landscape For Banks Means For European Money Market Funds

10-Sept-2015: European Money Market Funds Display Resilience In Tough Times

05-Aug-2014: Principal Stability Fund Ratings Will Likely Hold Steady Amid Money Market Fund Reform

17-Sep-2014: Challenging Times Are Testing The Resilience Of Sterling Money Market Funds

16-Oct-2014: Euro Money Market Funds Are Well-Positioned To Retain Assets Despite Negative Yields

04-Dec-2013: New U.S. Treasury Floating-Rate Notes Are Consistent With Our Principal Stability Fund Ratings Criteria

29-Nov-2013: EC Regulation For Money Market Funds May Have Unintended Consequences

17-Sep-2013: Q&A: Five Years After The Credit Crisis, Money Market Funds Adapt To Changes

18-Jun-2013: Assessing The Impact That Recent U.S. Money Market Fund Reform Proposals Could Have On Principal Stability Fund Ratings

25-Mar-2013: Money Market Funds' "Shadow" Net Asset Values Are In The Spotlight Again

21-Mar-2013: Lifting The Veil: Increasing Transparency And Resilience For Banks, Nonbanks, And Investors In The Triparty Repurchase Agreement Market

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