“Davidson” submits:
1st time I have ever seen this disclaimer about S&P Ratings changing with conditions. It is a ‘cover your ass’ disclaimer that shows Wall Street is feeling a threat to never having warned investors in the past to conditions that threatened the ratings of issues we promoted with abandon in the past.
A big change in my opinion.
Any rating from S&P, Moody’s or other national recognized rating agency that accompanies the offering of any security by Oppenheimer should constitute only one factor in an investor’s decision to purchase such security as such rating is subject to change. Any Oppenheimer employee describing the security or issuer must include a notification that all ratings may be subject to change in light of the recent rating change of securities issued by the United States of America and its Agencies.
Fixed income securities, i.e. bonds, entail a degree of interest rate risk. In general, the longer the maturity of a security or the greater its duration (an estimate of the change in price for a given change in yield), means the higher the interest rate risk of the security. Investors need to be aware not only of the coupon and yield of a security but also how the market value or price of the security may be affected by a general change in interest rates.
Regardless of credit quality, longer duration fixed income instruments could potentially suffer market losses associated with a rapid, uncontrolled, increase in interest rates.