Drop! Buy! Refinance! Sell! DBRS helps make the call. The company issues credit ratings for corporate, financial, and government bonds throughout the world. Canada's largest credit rating agency, DBRS also operates in the US, Latin America, Europe, and Asia. In the US, DBRS is one of the 10 official Nationally Recognized Statistical Rating Organizations (NRSROs) approved by the SEC; about a dozen European nations have granted the company External Credit Assessment Institution (ECAI) status. DBRS maintains ratings on more than 43,000 companies. DBRS uses a variety of quantitative methodologies based on the various industries and markets it covers. Chairman and owner Walter Schroeder founded the company in 1976.
Schroeder stepped down as CEO in 2008. He was succeeded by his son David, previously the company's COO.
The credit rating industry, which had already been under fire for calling Enron a good credit risk in the days before the company declared bankruptcy, found itself under public scrutiny again for its role in the global recession in 2008 and 2009. Critics accused agencies of failing to alert investors to the weakened state of troubled companies, wreaking havoc on the credit markets. The agencies have also been accused of using oligarchic, opaque, and even self-serving methodologies. DBRS in particular came into the spotlight for giving high ratings to Canadian debt that other agencies had passed on rating; those products ended up causing big losses for investors. The company responded by assuring regulators and investors that it will operate in a more transparent fashion.
In 2008, the company closed its three offices in Europe (in Frankfurt, London, and Paris), where it began branching into providing structured finance ratings in 2005. The company laid off about a third of its staff, including some 70 employees in North America.
In more uplifting news, the US government in 2009 allowed DBRS (and Realpoint, another rating agency) to rate commercial mortgage backed securities (CMBS) for its $800 billion Term-Asset Backed Securities Loan Facility (TALF) program, the second major government bailout program after the more well-known Troubled-Asset Relief Program (TARP). TALF was initially open only to ratings giants Moody's, Fitch Ratings, and Standard & Poor's.
DBRS has offices in Toronto, New York, and Chicago. – less