Fourth-ranked ratings agency DBRS sold
The headquarters of closely held DBRS, which has offices in New York, Chicago and London, will stay in Toronto, and Walter Schroeder, the firm’s founder, will remain an investor, the companies said in a statement yesterday.
“While our Canadian franchise and culture will continue to be at the core of DBRS’s operations, the breadth and depth of both Warburg Pincus and Carlyle’s international presence will be invaluable to DBRS,” Mr Schroeder said in the statement.
Carlyle and Warburg were attracted to DBRS primarily due to its strong position in Canada and niche products like commercial mortgage-backed securities, which will provide steady cash flow as it looks to expand elsewhere in the US and Europe, according to a person familiar with the matter.
There are also few competitors in the space, sources said. DBRS holds about 2% of the market dominated by Moody’s Investor Service, Standard & Poor’s, and Fitch Ratings. Olivier Sarkozy, head of Carlyle’s financial services team, said DBRS will continue to expand globally, working with the current management team, including chief executive Dan Curry.
“The world needs more global ratings franchises that issuers and investors alike can count on to provide timely and insightful ratings on a consistent and impartial basis,” Mr Sarkozy said.
DBRS provides credit rating opinions on more than 1,000 financial institutions, corporate entities, government bodies and various structured finance product groups in north America, Europe, Australasia and South America.
Reuters reported earlier this month that Carlyle and Warburg of New York were in talks to buy DBRS.
DBRS was advised by Perella Weinberg Partners as financial adviser and Torys as legal counsel. CIBC World Markets served as financial adviser and Wachtell, Lipton, Rosen & Katz and Stikeman Elliott served as legal counsel to The Carlyle Group and Warburg Pincus.
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