Does a change in a global scale rating on a ASEAN sovereign necessarily cause a change of ratings on the regional scale?
The ASEAN scale ratings on issuers domiciled in that country could be affected if developments that drove the change in the global scale rating on the sovereign also impact the credit profile of other issuers in that country, especially issuers that had been rated the same as, or above, the sovereign rating. If the change in creditworthiness is confined to a single ASEAN country, the ASEAN scale ratings on issuers in other ASEAN countries are unlikely to change. It should be pointed out that in periods of extreme and widespread financial stress most, or even all, regional scale ratings could decline due to acute default risks, even though the relative creditworthiness of many issuers would be unchanged. Generally, Standard & Poor’s uses flexibility created by a regional scale to avoid rating revisions that might confuse the market. However, recalibration of a regional rating scale may require rating changes in rare cases.
