The qualitative factors referred to in point (b) of Article 136(2) of Regulation (EU) No 575/2013 shall be:

1. (a)

   the definition of default considered by the ECAI, as referred to in Article 8;

2. (b)

   the time horizon of a rating category considered by the ECAI, as referred to in Article 9;

3. (c)

   the meaning of a rating category and its relative position within the rating scale established by the ECAI, as referred to in Article 10;

4. (d)

   the creditworthiness of the items assigned the same rating category, as referred to in Article 11;

5. (e)

   the estimate provided by the ECAI of the long run default rate associated with all items assigned the same rating category, pursuant to point (a) of Article 136(2) of Regulation (EU) No 575/2013, as set out in Article 12;

6. (f)

   the relationship established by the ECAI ("internal mapping"), where available, between, on the one hand, the rating category which is being mapped, and, on the other hand, other rating categories produced by the same ECAI, where a mapping for the latter categories has already been set out according to this Regulation, as referred to in Article 13;

7. (g)

   any other relevant information that can describe the degree of risk expressed by a rating category.

The type of events considered by the ECAI for the purposes of establishing whether an item is in default situation shall be compared to those specified in Article 4(4) by using all available information. Where the comparison indicates that not all such types of default events have been considered by the ECAI, the quantitative factors referred to in Article 1 shall be adjusted accordingly.

The time horizon considered by the ECAI for assigning a rating category shall provide a relevant indication of whether the level of risk of that rating category is sustainable over the time horizon specified in Article 4(2).

1. (1)

   The meaning of a rating category established by the ECAI shall be set according to the characteristics of the capacity of financial commitments as reflected in the items assigned such rating category being honoured, and more in particular by its degree of sensitivity to the economic environment and its degree of proximity to the default situation.

2. (2)

   The meaning of a rating category shall be compared to the one established for each credit quality step, as set out in Article 15.

3. (3)

   The meaning of a rating category shall be considered in combination with its relative position within the rating scale established by the ECAI.

1. (1)

   The creditworthiness of items assigned the same rating category shall be determined by considering at least their size and the degree of sector and geographical diversification of their business activity.

2. (2)

   Different measures of creditworthiness assigned to items of the same rating category may be used, to the extent appropriate, to complement the information provided by the quantitative factors referred to in Article 1 where they are reliable and relevant for the mapping.

The estimate provided by the ECAI of the long run default rate associated with all items assigned the same rating category shall be taken into account for the purpose of the mapping as long as it has been adequately justified.

The corresponding credit quality step of other rating categories produced by the same ECAI for which an internal mapping exists according to point (f) of Article 7 shall be used as a relevant indication of the level of risk of the rating category which is being mapped.