It's just a provision to ensure that you have a reasonable amount of funds in the vault in case there is a writeoff. It's attaching a probability based on the rating. Let's say it's a triple-C rating or a double-B rating; these are formulas all banks follow. The provisioning rates would vary from as low as 4% or 5% for a very high-quality loan to something over 30% for a lower-quality loan. You have not written the loan off at all, but you've taken some insurance against it.
On June 11th, 2009. See this statement in context.