Fitch Publishes Criteria on Rating U.S. Mortgage REITs and Similar Finance Companies
Fitch's credit ratings for mortgage REITs are based on qualitative factors such as the company's business model, servicing capabilities, asset quality, management and governance, track record, and operating history. Quantitative factors include funding options, funding diversity, leverage and capitalization, unencumbered asset coverage, capital market access, dividend payout ratios, and operating performance. Funding diversity and financing strategy, liquidity, and unencumbered asset quality are typically major obstacles in a mortgage's progression toward achieving investment-grade ratings. Mortgage REITs typically have a soft cap at the 'BBB' rating category.