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Large pension funds have Terms & Conditions which state what classes of debt/asset each fund is allowed to hold. These are often defined relative to the Rating
by tezza 16y ago
Large pension funds have Terms & Conditions which state what classes of debt/asset each fund is allowed to hold.
These are often defined relative to the Rating Agency score. So when the rating changes (down), they are obliged to sell their holdings and not buy any further debt.
- nickpinkston 16y agoQuite true - which makes one wonder why these standards aren't more explicitly stated via a standard model in the contract - as opposed to relying on a supposedly "impartial" source.