Structured Finance Ratings

Structured finance ratings assess the creditworthiness of complex financial products, like asset-backed or mortgage-backed securities. Agencies review the underlying assets, cash flows, and legal structures to determine the likelihood that investors will receive timely payments. These ratings help investors understand the risk involved, indicating whether the security is low, medium, or high risk. Higher-rated instruments generally suggest lower risk of default, while lower-rated ones carry more uncertainty. Overall, structured finance ratings serve as an important tool for investors to evaluate potential risks and make informed investment decisions in sophisticated financial products.