Moody's Investors Service has developed a new framework for evaluating the effect on ratings that having little or no terrorism coverage may have. This relates specifically to building loans that make up part of US commercial mortgage-backed securities (CMBS) deals.
Moody's said it will not be downgrading the ratings of any existing deals in the next few months, while it carries out this evaluation.
However, analyst Daniel B. Rubock said: "In the intermediate term, we will be looking closely at a limited number of high-profile buildings to determine what effect a lack of terrorism insurance may have on ratings."
New deals will be evaluated using the new framework which assesses a building's likelihood of being a terrorist target, and measures the diversity of buildings in a particular CMBS deal's pool of loans.
