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Showing posts from October 4, 2017

Dutch-based holding company ASR Nederland N.V. is issuing notes that will be eligible as Restricted Tier 1 (RT1) capital under Solvency II.

Dutch-based holding company ASR Nederland N.V. is issuing notes that will be eligible as Restricted Tier 1 (RT1) capital under Solvency II. We are assigning our 'BB' issue rating to the RT1 notes. We expect to classify the bonds as having intermediate equity content. The rating on the bonds is four notches below the long-term issuer credit rating (ICR) on ASR Nederland N.V. (BBB+/Stable/--); one notch to reflect the notes' subordinated status to senior bondholders, one notch to reflect the risk of potential conversion to equity and loss of principal, and two notches to reflect the mandatory and optional interest cancellation features. The notching on this instrument is wider than that applied for ASR Group's other subordinated instruments as we think the various mandatory coupon cancellation triggers of the RT1 notes create an increased risk of coupon nonpayment on a going-concern basis and we also consider the potential loss of principal for noteho

Japan-Based SMBC Servicer has a significant track record in handling commercial loans as a special servicer.

The company's management team and collection staff have ample servicing experience. SMBC Servicer has a significant track record in handling commercial loans as a special servicer. The company has computer systems to support efficiency of the servicing business. The company has established data backup procedures and facilities, including periodic tests executed under its disaster contingency plans. We are affirming our STRONG ranking on SMBC Servicer as a commercial loan special servicer. The outlook on the ranking is stable. The STRONG ranking primarily reflects our views on: The ample servicing experience of the company's management team and collection staff; The company's significant track record in handling commercial loans as a special servicer; Its computer systems supporting efficiency of the servicing business; and Its established data backup procedures and facilities, including periodic system resumption tests executed under

Specialty chemical company Vantage Specialty Chemicals Inc. has entered into an agreement to be acquired by private equity firm H.I.G. Capital LLC.

Specialty chemical company Vantage Specialty Chemicals Inc. has entered into an agreement to be acquired by private equity firm H.I.G. Capital LLC. The company plans to issue a $540 million first-lien credit facility, consisting of a $75 million cash flow revolver and a $465 million term loan, as well as a $170 million second-lien term loan credit facility. The company will use proceeds to fund the transaction and repay existing debt. We are affirming our 'B-' corporate credit rating on Vantage, assigning our 'B-' issue-level and '3' recovery ratings to the proposed first-lien credit facilities, and assigning our 'CCC' issue-level and '6' recovery ratings to the proposed second-lien credit facility. We are also affirming our 'B-' issue-level rating, with a '3' recovery rating, on the company's existing first-lien credit facility, and 'CCC' issue-level rating, with a '6' recovery rating, o

The proportion of priority liabilities accounted for about 40% of Sharp's total assets.

We have completed our review of our issue rating on Sharp's senior unsecured debt, which we placed under criteria observation (UCO) following revision of our criteria for corporate issue ratings. We are raising our senior unsecured debt rating on Sharp one notch to 'B+' and are removing the rating from UCO. As a result, the senior unsecured debt rating on Sharp is the same level as our long-term corporate credit rating on the company. Our rating action takes into consideration Sharp's capital structure, including senior unsecured debt. The proportion of secured debt ranked senior to senior unsecured debt exceeds 65% of Sharp's consolidated total debt. Therefore, we adjusted the issue rating downward one notch from the long-term corporate credit rating. In accordance with our criteria prior to the revision, we had adjusted the issue rating downward two notches because the proportion of priority liabilities, such as secured debt, accounte

The credit risk of Australian Mortgage Trust

The credit risk of the underlying collateral portfolio and the credit support provided to each class of notes are commensurate with the ratings assigned. Credit support is provided by subordination and lenders' mortgage insurance (LMI) cover for the class A and class AB notes. Subordination provided to the class A and class AB notes is in excess of our opinion of the minimum 'AAA (sf)' level of credit support when giving no credit to LMI. The issuer's capacity to pay interest to the class A and class AB note holders in full on each interest payment date, and to repay principal in full no later than the final maturity date, under their respective rating stresses. For the timely payment of senior expenses, class A and class AB note interest is supported through the ability to draw on principal, then by an amortizing liquidity facility to be provided by Citigroup Pty Ltd. (Citigroup). The amortizing liquidity facility is sized at 1.25% of the note balanc

Auckland's budgetary performance remains relatively weak and debt is high compared with peers' as Auckland builds its infrastructure.

Auckland Council's experienced financial management team has contained its debt levels amid substantial demand for infrastructure. Auckland's budgetary performance remains relatively weak and debt is high compared with peers' as Auckland builds its infrastructure. We are affirming our 'AA' long-term and 'A-1+' short-term issuer credit ratings on Auckland. The stable outlook reflects our expectation that the council will continue to manage the city's growth pressures and large capital expenditure requirements while limiting additional new borrowing. Downside Scenario Downward rating pressure might arise if we consider its financial management is weakening, resulting in higher deficits and debt levels. This could occur if infrastructure spending substantially increases without offsetting revenues, leading to after-capital account deficits underperforming our forecasts. This would result in debt rising to more than 270% of opera

Compark Business Campus Metropolitan District Bond proceeds will be used to refund the district's outstanding series 2007 bonds and extend the final maturity to 2051 from 2034

Bond proceeds will be used to refund the district's outstanding series 2007 bonds and extend the final maturity to 2051 from 2034 The stable outlook reflects our view of the district's adequate available reserves and coverage levels and lack of additional debt plans. Precluding the district from an investment-grade rating is our view of the district's concentrated tax base and growing status of development. We do not anticipate changing the rating during the two-year outlook horizon. We could lower the rating should tax base growth begin to taper, resulting in declines or stagnation in assessed values, or if the district were to issue additional debt, increasing its already high debt burden. Should the district's tax base diversify substantially, or if the district's debt burden were to decrease to levels comparable with those of higher-rated peers, we could consider raising the rating.

The Carlyle Group has entered into an agreement to acquire Romulus, Mich.-based auto hauler CB URS Holdings Corp.

The Carlyle Group has entered into an agreement to acquire Romulus, Mich.-based auto hauler CB URS Holdings Corp. We are assigning our 'B' corporate credit rating to URS. At the same time, we are assigning our 'B' issue-level rating and '3' recovery rating to URS' proposed $260 million first-lien term loan. The stable outlook reflects our belief that URS will continue to gradually increase its market share in the remarketed auto-hauling sector. We also anticipate that the company will moderately increase its EBITDA in line with our expectations while maintaining debt leverage of around 4x over the next 12 months. At the same time, we assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed $260 million first-lien term loan due 2024. The '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default. Our rati

Securitized Term Auto Receivables Trust 2017-2's issuance is an ABS transaction backed by a pool of fixed-rate Canadian dollar-denominated prime auto loan receivables originated by the Bank of Nova Scotia.

Securitized Term Auto Receivables Trust 2017-2's issuance is an ABS transaction backed by a pool of fixed-rate Canadian dollar-denominated prime auto loan receivables originated by the Bank of Nova Scotia. We assigned our ratings to the class A-1, A-2a, A-2b, A-3, and A-4 notes. The ratings reflect our view of the transaction's credit enhancement, collateral pool, and payment structure, among other factors. The note issuance is an asset-backed securities transaction backed by a pool of fixed-rate Canadian dollar-denominated prime auto loan receivables originated by the Bank of Nova Scotia. The ratings reflect our view of: The availability of approximately 9.2% credit support (including excess spread) for the class A notes, respectively, based on our stressed break-even cash flow scenarios. This credit support level provides coverage of more than 5.0x our 1.30%-1.50% expected cumulative net loss range for the class A notes. The timely interest and principa

Eurasia Insurance demonstrated strong operating results in the first eight months of 2017, materially outpacing local peers.

Following the recent revision of our outlook on Kazakhstan to stable from negative, we have a more favorable view of Eurasia Insurance Co.'s investments and liquidity, given its significant exposure to Kazakhstan sovereign bonds. In addition, Eurasia Insurance demonstrated strong operating results in the first eight months of 2017, materially outpacing local peers. We are therefore revising our outlook on Eurasia Insurance to positive from stable and affirming our 'BB+' and kzAA-' ratings on the company. The positive outlook indicates the potential for an upgrade if Eurasia Insurance maintains very strong capital metrics and sound operating performance in the next 12-18 months, despite the challenging operating environment for reinsurers globally. The outlook revision follows our review of Eurasia Insurance after we revised our outlook on Kazakhstan to stable on Sept. 8, 2017. We now have a more favorable view of the company's investment quality

Capital One Multi-Asset Execution Trust's issuance is an ABS transaction backed by a collateral certificate issued by Capital One Master Trust, which is collateralized by receivables generated by revolving consumer and small business credit card accounts owned by Capital One Bank (USA)

Capital One Multi-Asset Execution Trust's issuance is an ABS transaction backed by a collateral certificate issued by Capital One Master Trust, which is collateralized by receivables generated by revolving consumer and small business credit card accounts owned by Capital One Bank (USA) N.A. or one of its affiliates. We assigned our preliminary ratings to the series 2017-4, 2017-5, and 2017-6 class A notes. The preliminary ratings reflect our view of the transaction's credit support, inherent credit risk, and legal structure, among other factors. The note issuance is an asset-backed securities transaction backed by a collateral certificate issued by Capital One Master Trust, which is collateralized by receivables generated by revolving consumer and small business credit card accounts owned by Capital One Bank (USA) N.A. or one of its affiliates. The preliminary ratings are based on information as of Oct. 4, 2017. Subsequent information may result in the assi

Wells Fargo Bank was named master servicer of multiple issuances in 2017

WFB was named master servicer of multiple issuances in 2016 and 2017; Realigned certain functions to create early-stage and ongoing management teams; Implemented a more robust committee process to identify servicers for onsite reviews; Implemented a new cash disbursement system and transitioned certain cash functions to the operations team; Established documentation for and began tracking servicer loan modification programs implemented due to the sunset of the Home Affordable Modification Program; Implemented an operational assessment as part of servicer reviews to further develop its analysis of servicer performance to incorporate risk areas, including vendor oversight, among others; and Formalized and documented plans and processes to handle servicer default events. The outlook for the ranking is stable. WFB maintains sound infrastructure and the resources necessary to operate as an effective master servicer. It also continues to identify opportunities to imp

CNH Equipment Trust's securitizations are backed by equipment retail installment sales contracts originated by CNH Industrial Capital America LLC

CNH Equipment Trust's securitizations are backed by equipment retail installment sales contracts originated by CNH Industrial Capital America LLC and serviced by New Holland Credit Co. LLC. We reviewed five CNH Equipment Trust transactions: series 2013-D, 2014-B, 2014-C, 2015-B, and 2015-C. We raised ratings on five classes and affirmed ratings on eight classes from the five transactions. The rating actions reflect our views regarding future collateral performance as well as each transaction's structure and credit enhancement, among other factors. ll of the transactions have fewer cumulative net losses (CNLs) than our initial CNL range. As a result we lowered our range for each series other than 2015-C, because of lower default frequencies and our view of future collateral performance. We are maintaining our initial CNL range for series 2015-C pending further collateral performance, given its higher pool factor and longer amortization period (see tables 1 a

Intercorp Financial Services Inc.has recently announced the acquisition of Sura's insurance and mortgage business in Peru, which should increase the IFS subsidiaries' market share in retirement annuities

Peru-based non-operating holding company, IFS, has a prominent business position in the domestic financial system through its subsidiaries in the banking, insurance, and wealth management businesses. Moreover, the company has recently announced the acquisition of Sura's insurance and mortgage business in Peru, which should increase the IFS subsidiaries' market share in retirement annuities and individual life insurance operations. We are assigning our 'BBB-' long-term and 'A-3' short-term issuer credit ratings on the company. The stable outlook on IFS reflects the outlook on that of its main operating subsidiary, Peru-based universal bank, Banco Internacional del Peru-Interbank, and our expectation that IFS's subsidiaries will maintain healthy profitability metrics and continue to upstream dividends to the parent to service its financial obligations. The ratings on IFS are one notch below the group credit profile (GCP) due to the holdi

Weakening Crockett Cogeneration L.P. Project's financial performance based primarily on our view of a decline in the market heat rate for short-run avoided cost pricing

The rating action reflects our expectation of a weakening in the project's financial performance based primarily on our view of a decline in the market heat rate for short-run avoided cost pricing,SRAC pricing determines the price that Pacific Gas and Electric Co. pays to Crockett for contracted energy revenues. The negative outlook reflects the risk of financial deterioration from the project's exposure to SRAC for approximately 50% of revenues from growing renewable penetration in the state.

The Catalan government' escalation may damage the coordination and communication between the two governments, which is essential to Catalonia's ability to service its debt on time and in full.

The Catalan government's political confrontation with Spain's central government has escalated following a referendum in Catalonia on Oct. 1, 2017, on the region's independence. We see a risk that this escalation may damage the coordination and communication between the two governments, which is essential to Catalonia's ability to service its debt on time and in full. We are placing our 'B+/B' ratings on Catalonia on CreditWatch with negative implications. We expect to resolve the CreditWatch within the next three months. Downside Scenario  We could lower our ratings on Catalonia by one or more notches if we believed that escalating political tensions between Catalonia's government and Spain's central government could put in question the full and timely refinancing of Catalonia's short-term debt instruments or undermine the effectiveness of the central government financial support to Catalonia. Upside Scenario  Conversely, we

Energy Limited Senior Unsecured Debt' original issuance of $1.05 billion of unsecured due 2019 issued by CEF, whose outstanding balance after refinancing is about $488 million.

Our rating action takes into consideration CEL's capital structure, which consists of about $830 million of secured debt, and about $1.54 billion consolidated unsecured debt, and about $270 million of unsecured debt issued by its operating subsidiaries. Under the new criteria, we have revised the approach to indicate subordination risk. For CEL, since all the subsidiary debt (priority debt) is less than 50% of CEL's consolidated debt, our ratings on CEL's unsecured debt (issued through CEF)are 'BB', or the same as the issuer credit rating, because no significant element of subordination risk is present in the capital structure. The issue ratings raised are as follows: The original issuance of $1.05 billion of unsecured due 2019 issued by CEF, whose outstanding balance after refinancing is about $488 million. The $300 million unsecured debt due 2022 issued by CEF. The $500 million unsecured debt due 2025 issued by CEF.

Gibson Energy ULC announced refinancing, which will decrease annual interest costs, extend the debt maturity profile, and add financing flexibility.

We are affirming our 'BB' long-term corporate credit rating on Calgary, Alta.-based midstream energy company Gibson Energy ULC. The affirmation follows the company's announced refinancing, which will decrease annual interest costs, extend the debt maturity profile, and add financing flexibility. We are also affirming our 'BB' issue-level rating on Gibson's senior unsecured debt; the '3' recovery rating on the debt is unchanged. The stable outlook reflects our view that the company will continue to expand the more stable infrastructure business segment through organic growth. At the same time, S&P Global Ratings affirmed its 'BB' issue-level rating on the company's senior unsecured notes. The '3' recovery rating on the notes is unchanged, and indicates that lenders can expect meaningful (50% to 70%; rounded estimate 65%) recovery if a default occurs. The affirmation follows Gibson's recent announcement to

California continues to make deposits to its budget stabilization account, resulting in larger budget reserves than the state has had in recent memory.

Proceeds from the federally taxable GO bonds will help finance the state's Proposition 1A high speed rail project and pay down a portion of the state's outstanding commercial paper (CP). The tax-exempt various purpose GO bonds will also be used to pay down outstanding CP. The stable outlook reflects, in part, that California's finances are structurally aligned (with sufficient recurring revenues to support the state's legally required ongoing expenditure base). California continues to make deposits to its budget stabilization account, resulting in larger budget reserves than the state has had in recent memory. The passage of Proposition 2 in 2014 helped institutionalize a more disciplined approach by requiring annual deposits to the reserve fund. In addition, the measure captures capital gains-related revenue spikes, thereby discouraging the state from building instances of extraordinary revenue growth into its budget base. The state has also restore

Charlotte Douglas International Airport' consistent growth in enplanements through the most recent economic downturn and through the merger of US Airways Inc

The rating reflects our assessment of CLT's: Consistently strong liquidity position and very low airline cost structure; Strong financial metrics, which we expect to continue; Generally favorable demand characteristics and positive passenger trends; and American's historical commitment to the airport. Somewhat offsetting credit weaknesses, in our opinion, include CLT's: Very high air carrier concentration (American accounts for approximately 91% of passengers boarding flights); and High exposure to connecting passengers (73%). CLT serves an area economy that we consider strong, diverse, and expanding: the Charlotte-Concord combined statistical area has a population of 2.49 million people. The city owns and operates CLT, seven miles west of Charlotte's central business district. The stable outlook reflects our view that CLT's financial margins and liquidity position will remain strong despite additional borrowing plans. We do not expect to