The Impact Ratings Committee earlier this week unanimously voted to place debt directly issued by Wells Fargo and its subsidiaries in the Under Review rating category. The following description will be included in quarterly reports for accounts currently holding these bonds and we will discuss this issue (and any associated developments) during our quarterly impact call:
As a result of the recent controversy surrounding sales practices and associated business policies, Wells Fargo (WFC) has been placed in an Under Review (UR) status. No new purchases of debt issued by the company are authorized in SNW Impact accounts. The response to this controversy by the company, its senior management, and the Board of Directors as it relates to changing policies, clawing back executive compensation, and/or making changes at the executive level will determine whether existing holdings are maintained or if they will be liquidated.
A rating of UR will result in: 1) provisional hold on new purchases; 2) review of the issue at 90 and 180 days from implementation of provisional hold; 3) if no change after 180 days, adjustment to rating to reflect the ineligibility of the issuer; 4) subsequent liquidation of any holdings in client accounts and replacement with eligible credits in a prudent and thoughtful manner over the next 180 days. This process can be accelerated by the SNW Impact Team if the severity of the issue so warrants.