In credit rating, WD stands for Withdrawn. This indicates that a rating has been removed by the ratings agency.
The reference states that a rating is marked as WD for various reasons. Understanding these reasons provides insight into why a rating might no longer be active or visible.
Reasons for Rating Withdrawal (WD)
According to the provided reference, a credit rating can be withdrawn for several specific reasons. These include:
- Debt Maturity, Calls, Puts, Conversions, etc.: The debt instrument has reached its maturity date, or actions like calls, puts, or conversions have occurred, making the rating no longer necessary.
- Business Reasons: Changes related to the issuer or the specific debt issue, such as:
- A change in the size of the debt issue.
- Other issuer-specific business decisions.
- Issuer Defaults: The issuer has defaulted on the rated debt instrument. In this case, the rating is withdrawn after the default event.
It's important to note that once a rating is withdrawn (WD), the ratings agency typically ceases to provide ongoing surveillance or updates on that specific debt instrument or issuer rating.
Unsolicited Ratings
The reference also mentions "Unsolicited". This term, when associated with a WD rating, means:
- This specific rating was initiated by the ratings agency itself and was not requested by the issuer.
This indicates that the agency decided to rate the debt or issuer independently, without the issuer's explicit request or cooperation (which is common for many ratings). Even an unsolicited rating can eventually be withdrawn for the reasons listed above.
How WD Ratings Appear
When viewing historical credit rating data, you might see a rating series end with a WD designation and a date. This signifies the point at which the rating agency stopped rating that particular debt. It is different from a rating downgrade (e.g., from 'A' to 'B') or upgrade, as it means the rating is no longer being maintained at all.
Understanding the WD status is crucial when analyzing a company's or debt instrument's credit history, as it explains why a rating might suddenly disappear from active lists.
