EUR 248 million Series 3 Notes, Assigned Baa3 (sf)
London, 08 May 2013 -- Moody's Investors Service has today assigned definitive rating to notes
issued by Fondo de Titulización del déficit del sistema
eléctrico, FTA (FADE):
....EUR248 million Series 3 Notes, Assigned
Baa3 (sf)
These issuances will constitute an increase in the total amount of Series
3 Notes issued in March 2011. With this new issuance, the
total amount of Series 3 Notes will be EUR 2.649 billion
Moody's also affirms the existing ratings of notes issued by Fondo de
Titulización del déficit del sistema eléctrico,
FTA:
Series 1, affirmed at Baa3(sf)
Series 2, affirmed at Baa3(sf)
Series 3, affirmed at Baa3(sf)
Series 4, affirmed at Baa3(sf)
Series 5, affirmed at Baa3(sf)
Series 10, affirmed at Baa3(sf)
Series 13, affirmed at Baa3(sf)
Series 14, affirmed at Baa3(sf)
Series 16, affirmed at Baa3(sf)
Series 17, affirmed at Baa3(sf)
Moody's has not rated EUR200 million Series 6 Notes issued by FADE on
18 November 2011 and increased on 13 February 2013, EUR125 million
Series 7 Notes issued by FADE on 9 December 2011, EUR200 million
Series 8 Notes issued on 7 February 2012, EUR492.3 million
Series 9 initially issued on 10 February 2012 and increased on 15 February
2012 and 31 October 2012, EUR125 million Series 11 issued on 22
February 2012, EUR944 million Series 12 initially issued on 29 February
2012 and increased on 14 December 2012 or EUR89 million Series 15 Notes
issued on 8 February 2013.
RATINGS RATIONALE
The rating of the notes takes into account the specific nature of this
transaction and unique structure, which differs substantially from
other electricity tariff securitisations and is recognised by a Spanish
government royal decree. Moody's assigned the ratings primarily
based on: (i) an evaluation of the guarantee from the government
of Spain, which guarantees the interest and principal payments on
the notes; (ii) the current rating of the government of Spain (Baa3/(P)P-3);
and (iii) an evaluation of the structural features of the transaction.
The rating of the notes is fully linked to the rating of the government
of Spain, as the claims of the issuer under the guarantee represent
an unconditional, irrevocable, legal, valid and binding
obligation of the Spanish government, as confirmed by the transaction's
legal counsel. Furthermore, if the government of Spain failed
to make the required payments under the guarantee, this could trigger
an event of default if the management company considered this course of
action in the best interest of the noteholders.
The rating of the notes does not consider the additional support that
could be brought by the security over the assets due to (a) the potentially
large cash-flow mismatches between the assets and the rated liabilities,
and (b) the level of predictability of the assets timing of payment based
on the available information.
This transaction is a securitisation of credit receivables attributed
to certain Spanish utility companies and recognised by Spanish government
royal decree. The securitisation allows the utility companies to
obtain compensation for shortfalls in the settlement of their regulated
activities in the electricity market ("tariff deficit"). The tariff
deficit is the difference between the costs incurred to supply the power
and the regulated tariffs charged to the end users. The compensation
is considered a fixed cost and a fixed amount is added to the electricity
bills of the consumers in order to cover this deficit over the next 15
years. The Spanish electricity regulator (Spanish Comisión
Nacional de Energia) sets, administers and receives these amounts
and passes them on to the specified utilities companies.
The issuer has acquired a portion of the tariff deficit receivables generated
in 2003-2005 and 2010. This share accounts for approximately
EUR 63.186 million as of the closing date. The issuer previously
issued series 1, series 2, series 3, series 4,
series 5, series 10, series 13, series 14 and series
16 for a total amount of EUR 18.352 billion (rated Baa3 (sf)),
plus series 6, series 7, series 8, series 9, series
11, series 12 and series 15 for an amount of EUR2.175 billion
(not rated by Moody's) as part of the programme. The issuer will
be able to acquire additional tariff deficit receivables over the five
years following the first issuance and issue new series notes, as
well as issue notes to refinance existing series over the next 20 years.
All series of notes will rank pari passu.
•The main features of the guarantee granted by the Government of
Spain are:
The guarantee is irrevocable and unconditional.
•The maximum limit for the programme amount is EUR22 billion.
This limit may be increased to EUR25 billion, subject to ongoing
approval of the guarantee limit in the General State Budget Law.
•The obligations assumed shall be enforceable on the date where the
guaranteed obligation becomes due (principal or ordinary interest).
•The structure envisions that the guarantee will be enforced by the
management company (on behalf of the investors).
The amounts due under the notes accrue penalty interest from due payment
date. This penalty interest is covered by the government guarantee
from the date the interest / principal payments are due (i.e.
from the payment date when a shortfall occurs and needs to be covered
by the guarantee), as long as the management company requires the
payment to the guarantor within five days from the payment date.
In addition, a credit line granted by Instituto de Credito Oficial
for a maximum amount of EUR2 billion will be available to cover the issuer's
regular senior expenses as well as interest and principal on all series
of notes.
Moody's did not perform any cash flow analysis or simulation of stress
scenarios as the rating is based on the rating of the Spanish government
through the guarantee.
The rating addresses the expected loss posed to investors by the legal
final maturity of the notes (2034). In Moody's opinion, the
structure allows for ultimate payment of interest and principal on the
Notes. Moody's ratings address only the credit risks associated
with the transaction. Other non-credit risks have not been
addressed, but may have a significant effect on yield to investors.
The provisional rating on the EUR248 million issuance under Series 3 was
assigned on 3 May 2013.
Moody's did not perform any cash flow analysis or simulation of stress
scenarios as the rating is based on the rating of the Spanish government
through the guarantee.
REGULATORY DISCLOSURES
Moody's did not receive or take into account a third-party
assessment on the due diligence performed regarding the underlying assets
or financial instruments in this transaction.
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Greg O'Reilly
Analyst
Structured Finance Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Ning Loh
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's Investors Service has today assigned definitive rating to notes issued by Fondo de Titulización del déficit del sistema eléctrico, FTA (FADE)
