Fitch Ratings has released a special report on rating protected cell companies (PCCs) in response to requests.
The report identifies three attributes of PCCs that are possible credit concerns. These include the level of segregation between protected cells, the link between protected cells and their captive sponsors, and the link between protected cells and the PCC sponsor.
In summary, the rating agency is concerned that the segregation of cells has never been tested in a legal context.
Fitch also believes that it is unclear whether or not protected cells should receive any attribution of strengths or weakness from the assets in the PCC's general account.
The rating agency expects this to be the first report in a series of ongoing research into PCCs. This research may ultimately lead Fitch to publish criteria for rating PCCs or Fitch may conclude that it cannot publish criteria.
