what is weighted average rating factor warf 
the weighted average rating factor warf is a measure that is used by credit rating companies to indicate the credit quality of a portfolio this measure aggregates the credit ratings of the portfolio s holdings into a single rating warfs are most often calculated for collateralized debt obligations cdos understanding the weighted average rating factor warf to calculate the weighted average rating factor on a cdo the rating agencies must first determine a credit rating for each instrument underlying the cdo in the fitch ratings taxonomy for example this rating can range from extremely high credit quality aaa to low quality ccc to default d this letter rating corresponds to a numerical rating factor which in turn correspond to the 10 year probability of default the warf is determined by calculating the weighted average of these numerical factors to calculate the weighted average the notional balance of the asset is multiplied by the rating factor and then these values are summed this sum is then divided by the total notional balance of the portfolio 