The Request for Comments period was launched on the 17th of March 2023 and was closed on 17th of April of 2023.

The Request for Comments affected the future EthiFinance Ratings’ Project Finance Methodology. During this period no comments were received.

EthiFinance Ratings is launching a request for comments for its Project Finance Ratings methodology and is inviting market participants to submit their comments and suggestions.

The Request for Comments period is starting on 17th of March and is expected to last until mid-April. Unless specified otherwise, these comments will be considered as public. During that period, we will also reach out to rated issuers to explain the new methodologies and obtain feedback. Comments should be submitted at the following email address: rfc@ethifinance.com. The final version is expected to be published and implemented in Q2 2023.

This proposed methodology incorporates a scorecard with changes in the analytical factors and the weights given to them. We introduce an ESG analysis with selected KPIs correlated to the credit quality of the rated entity, including the integration of physical risks into credit ratings. Also, we present further refinements and clarifications in order to provide additional transparency and clarity regarding our methodology.

In its February review, EthiFinance Ratings maintains the unsolicited rating of the Kingdom of Spain at A- with an improved outlook from Under-observation to Stable. This change is based on the stronger growth of the Spanish economy during the preceding financial year (5.5% compared to the expected 4.3%), avoiding recession in the last quarter, as well as the slowdown of inflationary pressures and a more favorable situation in the energy markets than expected. However, both factors are closely linked to the geopolitical situation, which is a factor of uncertainty that could put current forecasts at risk.

In accordance with Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, EthiFinance Ratings published in the month of December 2022 the Sovereign Rating Calendar for 2023, you will find the calendar here.

In its November review, EthiFinance Ratings maintains Portugal’s unsolicited credit rating at BBB with a change of outlook from stable to positive “due to the good performance of both the socio-economic and fiscal situation” as well as the “stability in the Portuguese government” headed by Antonio Costa, who reached an absolute majority in the early elections of January 30.

Response to comments related to the coporate long term, coporate short term and instruments methodologies

The Request for Comments period was launched in early July 2022 and was closed on the 25th of August.

The Request for Comments affected the future EthiFinance Ratings methodologies on Long Term Corporate Ratings, Short Term Ratings, Instrument Ratings, Social Housing Providers Ratings, Investment Holding Ratings and Commercial Real Estate Transactions Ratings.

In its October review, EthiFinance Ratings maintained the city of Madrid’s unsolicited credit rating of A- trending Under Observation.

In its October review, EthiFinance Ratings maintained the city of Barcelona’s unsolicited credit rating of A-trending Under Observation.

In its September review, EthiFinance Ratings maintains the unsolicited rating of the Kingdom of Spain at A- with an Under-observation outlook. Despite the situation of uncertainty that economies are facing, the rating assesses both the positive growth that has been observed in 2021 and that has had continuity in the first two quarters of the year, and the impact of the Next Generation Funds, whose investments shall aim mainly to sectors of the productive economy with high added value (technology and industry, among others), the recovery of tourism activity, with an annual increase in tourism expenditure of 271.3%, and the dynamism of the labor market.

The Request for Comment period launched on 1st July 2022 for EthiFinance Ratings’ three methodologies on Corporate Ratings, Short Term Ratings and Instrument Ratings (previously called Bond Ratings) has lapsed, with the consultation closing on 25 August. We are currently reviewing all comments received and expect to revert and publish the final version in Q4 2022.

We thank all contributors for their input in the process.

This proposed corporate methodology incorporates changes in the analytical factors and their respective weights. We introduce an approach to non-financial (ESG) risk factors and their impact on the credit quality of a rated entity. Also, we present further refinements and clarifications in order to provide additional transparency and clarity regarding our methodology. Finally, a reviewed liquidity analysis process led to adjustments in the short-term rating methodology.

We anticipate that the vast majority of credit ratings will remain unchanged and for those ratings that could be impacted, the change would be limited to one notch, evenly distributed between positive and negative. Estimates have been realised with a standard economic scenario that is not considering a recession in the coming 24 months. A more conservative scenario would likely lead to an even more neutral effect on current ratings.

The document corresponds to the RfC and is provided for information purposes.