What should the offering document (POS) include regarding credit ratings?

The offering document, also known as the Preliminary Official Statement (POS), plays a crucial role in providing potential investors with relevant information about the securities being offered. Including credit ratings that may affect securities valuation is essential because these ratings inform investors about the perceived creditworthiness of the issuer and the associated risks of the investment.

Credit ratings directly influence how investors assess the stability and risk of the investment, impacting their decision-making process. Ratings from recognized agencies reflect their evaluations of the issuer's ability to meet its debt obligations, which can significantly affect the securities' market value and yield. By including this information in the POS, the issuer ensures that potential investors are equipped with an understanding of the credit landscape regarding the securities, thereby facilitating informed investment decisions and transparency in the offering process.

In contrast, focusing solely on current or historical ratings or providing an extensive analysis of rating fluctuations may not comprehensively address the prospective investors' needs for assessing the impact on security valuation. Current ratings provide a snapshot but do not offer context; historical ratings may show trends but are less relevant for immediate investment decisions; and a detailed analysis may overwhelm investors without directly informing their valuation considerations. Hence, it is essential to emphasize credit ratings that affect securities valuation as part of the offering document to satisfy both regulatory