New York, October 03, 2003 -- THE RATINGS OF THE FOLLOWING ABCP PROGRAMS WERE AFFIRMED BY MOODY'S AT PRIME-1 DURING THE PERIOD SEPTEMBER 25, 2003 THROUGH OCTOBER 2, 2003: MOODY'S ABCP RATING ACTIONS FOR THE SEVEN-DAY PERIOD ENDED OCTOBER 2, 2003:
BANK ONE'S PREFCO, FALCON AND JUPITER AND JPMORGAN'S PARCO PURCHASE $2.78 BILLION VARIABLE FUNDING CERTIFICATES FROM CREDIT CARD MASTER TRUST
Preferred Receivables Funding Corp. ("PREFCO"), Falcon Asset Securitization Corp. and Jupiter Securitization Corp., Bank One N.A.'s (Aa2/Prime-1/B+) multiseller ABCP conduit and Park Avenue Receivables Corp. ("PARCO"), JPMorgan Chase Bank's (Aa3/Prime-1/B) multiseller ABCP conduit, purchased an aggregate $2.78 billion of Class A variable funding certificates issued by a credit card master trust. Bank One's conduits each purchased $770.2 million and PARCO purchased $467.5 million of the Class A Certificate.
The Class A Certificate, rated A2, is backed by credit card receivables. First loss protection for the Class A Certificate is in the form of a subordinated Class B Certificate and overcollateralization. The protection must always equal at least 11.5% of the aggregate outstanding principal balances of the Class A and Class B Certificates. The transaction is partially supported by liquidity provided by Prime-1 rated JPMorgan Chase and Bank One for their respective conduits.
Program-level credit enhancement for each conduit was increased by 10% of its purchase commitment. PARCO is now authorized to issue up to $10.2 billion of ABCP. PREFCO may issue up to $20 billion, Falcon may issue up to $23 billion, and Jupiter may issue up to $17 billion of ABCP.
BAYERISCHE HYPO-UND VEREINSBANK'S ARABELLA ADDS CZK 4.15 BILLION CREDIT CARD TRANSACTION
Arabella Funding Ltd has purchased a note backed by credit card receivables originated in the Czech Republic. The note is in the amount of CZK (Czech Republic koruna) 4.15 billion, which is the equivalent of Euro 130 million. The note is issued by a special-purpose company. Arabella will benefit from a security interest in the receivables. In addition to significant levels of credit enhancement inherent in the structure of the financing of the receivables, Arabella will benefit from additional credit enhancement of 5% of the maximum purchase amount provided by HVB. In order to provide additional protection to investors, ABCP maturity will be limited to 45 days and Arabella will be prohibited from the further issuance of ABCP against this transaction should the pool or the servicer suffer any material deterioration in credit quality. With this addition, Arabella is now authorized to issue ABCP up to Euro 4.8 billion.
SOCIETE GENERALE'S BARTON PURCHASES $250 MILLION VFN
Societe Generale's (Aa3/Prime-1/B) Barton Capital Corp. has purchased a $250 million variable funding note (VFN) backed by wholesale receivables owed by dealers in agricultural and construction equipment. The VFN is explicitly rated Aa2, reflecting internal credit enhancement of 13.9%. The originators are Ba3-rated finance subsidiaries of a Ba3-rated manufacturer. In addition, program-wide credit enhancement has been increased by 8% of the amount of this facility. Liquidity provided by Societe Generale partially supports this transaction. Barton is now authorized to issue up to $12.3 billion of ABCP.
BEETHOVEN ADDS $270 MILLION CREDIT CARD FACILITY
Beethoven Funding Corp., a Dresdner Bank AG (A1/Prime-1/C-)-sponsored and administered ABCP program, added a $270 million interest in a variable funding certificate (VFC) that is part of a series issued from an unrated credit card master trust. The collateral backing the series consists of credit card receivables arising under a single affinity card relationship. The VFN is supported by subordination equal to 7.5% of the investor interest. Moody's has reviewed the portfolio and assessed the credit quality of the VFC to be investment-grade. The addition of 10% program-wide credit enhancement brings the credit quality to a level consistent with Beethoven's Prime-1 rating.
BRYANT PARK ADDS $250 MILLION MORTGAGE SECURITIZATION
Bryant Park Funding LLC, an ABCP program sponaored and administered by HSBC Bank USA (Aa3/Prime-1/B-), added a $250 million revolving warehouse facility backed by conforming residential mortgages. Bryant Park's interest in the facility is part of a $4.5 billion club deal among several ABCP conduits. The mortgage loans are expected to be converted into Aaa-rated mortgage-backed securities (MBS) backed by guarantees from government agencies; which will then be purchased by committed investors. The conduits are funding the mortgages during the window of time that these loans are being presented to various government agencies for conversion, and while investors are in the process of purchasing the MBS. In general, any loans not converted or not purchased by the investors will be purchased by liquidity facilities. The liquidity facility, provided by HSBC, will not fund for defaulted loans (loans that are over 90 days past due), if the loan is not converted. If a loan is converted and is not purchased by the investor, the liquidity facility will fund the asset as long as the agency supporting the security is not rated below Caa2. Through structural protection in the deal, the likelihood that a loan will become defaulted and liquidity will not be available is consistent with a Prime-1 rating. Program-wide credit enhancement will increase incrementally by 8% of outstandings against this transaction.
WEST LB'S COMPASS ADDS EURO 40 MILLION TRADE RECEIVABLE TRANSACTION
Compass Securitisation Limited, a Prime-1-rated, multiseller, partially supported ABCP conduit sponsored by WestLB AG (Aa1/Prime-1/D-, bank financial strength rating on review for possible downgrade), has added a Euro 40 million facility to its portfolio. In the transaction, Compass Securitisation Limited and its U.S. issuer Compass Securitization LLC make advances under funding agreements to a purchasing company, that finances purchases of trade receivables on a revolving basis. The receivables are originated by a German manufacturing company. Pool-specific credit enhancement is provided in the form of overcollateralization at a fixed reserve of 10.41%, which may be increased depending upon pool performance. Program-wide credit enhancement of 8% of the maximum purchase amount in relation to this transaction is provided to Compass through a surety bond. The transaction benefits from default and delinquency trigger events. These trigger events, if they occur, result in the termination of receivable purchases and amortization of the transaction. Liquidity is provided by WestLB AG. With this addition, Compass Securitisation Limited is now authorized to issue up to approximately Euro 14 billion of ABCP.
FLEET'S EAGLEFUNDING CAPITAL ADDS $100 MILLION FULLY SUPPORTED LOAN FACILITY
EagleFunding Capital Corp., Fleet Boston's (A1/Prime-1) partially supported, multiseller ABCP conduit, added a $100 million loan facility backed by film rights of a diversified entertainment company. The facility is supported by a surety bond provided by Aaa-rated MBIA. As long as the surety does not default, liquidity provided by Prime-1-rated Fleet National Bank will fully support the transaction. A surety default would be a failure to pay amounts payable under the surety bond, a judgment that the surety bond is no longer in full force and effect, or surety insolvency. EagleFunding's program-wide credit enhancement was increased by 5% of outstandings against this transaction, or up to $5 million, with the addition of the transaction.
COMMERZBANK'S KAISERPLATZ FUNDING LIMITED ADDS EURO 120 MILLION TRADE RECEIVABLE TRANSACTION
Kaiserplatz Funding Limited, a Prime-1-rated, multiseller, partially supported ABCP conduit sponsored by Commerzank AG (A2/Prime-1/C), has added a Euro 120 million trade receivable facility to its portfolio. Kaiserplatz Funding Limited makes advances under a funding agreement to a special purpose purchasing company, which finances French FCC (Fonds Commun de Creances) units backed by trade receivables. The receivables are originated by the French and Dutch subsidiaries of a British computer equipment supplier. Dynamic pool-specific credit enhancement is provided in the form of a combination of cash reserves and overcollateralization with a floor of 20% to cover defaulted receivables. Further credit enhancement of 5% of the maximum purchase amount in relation to this transaction is provided to Kaiserplatz Funding Limited by Commerzbank. The transaction benefits from default and delinquency trigger events. If these trigger events occur, they will result in the termination of receivable purchases and the cessation of ABCP issuance. Liquidity is provided by Commerzbank AG. With this addition, Kaiserplatz Funding Limited is now authorized to issue ABCP up to an amount of approximately Euro 2.5 billion.
BANK OF NOVA SCOTIA'S LIBERTY STREET ADDS $234 MILLION CLASS A VFC AND $16 MILLION CLASS C CERTIFICATE FROM CONSUMER LOAN MASTER TRUST
Liberty Street Funding Corp., Bank of Nova Scotia's (Aa3/Prime-1/B) partially supported, multiseller ABCP conduit, has added a partially supported, $234 million Class A variable funding certificate and a fully supported $16 million Class C certificate issued by a consumer loan master trust. The loans are originated and serviced by a Baa1-rated banking institution.
First-loss protection for the Class A certificate is 18.25% of the aggregate outstanding principal balances of the Class A, Class C, and Class D certificates. A liquidity facility from the Bank of Nova Scotia partially supports this transaction. Also, Liberty Street's program-level credit enhancement has been increased by 10% of its purchase commitment for the Class A certificate and an additional $16 million to cover its investment in the Class C Certificate, for a total of $39.4 million. Liberty Street is now authorized to issue up to $6.14 billion of ABCP.
SUMITOMO MITSUI'S MANHATTAN ASSET FUNDING INCREASES ITS INTEREST IN REVOLVING TRADE RECEIVABLES PURCHASE FACILITY FROM $100 MILLION TO $150 MILLION
Manhattan Asset Funding Company LLC (Manhattan), a partially supported, multiseller conduit sponsored by Sumitomo Mitsui Banking Corporation (SMBC) (A3/Prime-1/E), has increased its interest in a revolving purchase facility of trade receivables originated by subsidiaries of an unrated manufacturer and distributor of computer and electronic components. Manhattan's interest increased from $100 million to $150 million. This transaction is fully supported by liquidity provided by SMBC. Manhattan is authorized to issue up to $5 billion of ABCP. Currently, Manhattan has about $1.69 billion in outstanding ABCP, with $214 million in program-level credit enhancement.
RABOBANK'S MERMAID FUNDING ADDS CREDIT-LINKED NOTE
Mermaid Funding Corp., Rabobank's (Aaa/Prime-1/A) Prime-2-rated ABCP conduit, has added a $150 million credit-linked note transaction. In the transaction, Mermaid makes a $150 million deposit with Rabobank (Aaa/Prime-1/A) and executes a swap with Rabo Capital Services, Inc. (unrated). During the period of the deal, Rabobank will pay Mermaid interest on the deposit quarterly. The deposit serves as a source of liquidity for the deal. The reference entity is rated Baa2/Prime-2. ABCP tenor is limited to 95 days and no further ABCP may be issued if the reference entity is downgraded below Baa2 or Prime-2. If no credit event occurs with respect to the reference entity (such as a downgrade of the reference entity below Caa2), Rabobank must pay the deposit amount back to the conduit at the end of the transaction. If a credit event does occur, the conduit forfeits the deposit amount. Mermaid may now issue up to $225 million of ABCP.
BANK OF AMERICAS' RECEIVABLES CAPITAL CORP. AMENDS PROGRAM
Receivables Capital Corp., a post-review, multiseller conduit sponsored and administered by Bank of America, N.A. (Aa1/Prime-1/A-), has made several program amendments.
Receivables Capital Corp. has been converted to a limited liability company, so that its official name is now Receivables Capital Company LLC ("RCC").
RCC's program size has been increased from $12 billion to $18 billion.
In addition, RCC may now purchase non-U.S. dollar-denominated assets, and Bank of America will arrange for the appropriate hedging of foreign exchange risk with a Prime-1-rated bank.
RCC may now also purchase ABCP that is rated at least as high as the asset-backed commercial paper notes issued by RCC (Qualified ABCP). Qualified ABCP may be purchased without supporting liquidity facilities, as long as the ABCP to be purchased is maturity-matched with RCC's ABCP. Also, the discount or interest payable on the ABCP to be purchased must be at least as great as RCC's cost of funds.
RCC's program enhancement amount has been changed so that it is now assessed against the program's outstanding ABCP rather than total commitments. Formerly, enhancement was the greatest of 10% of program commitments, $300 million, and the largest purchase commitment in the program. Now it will be the greatest of 10% of outstanding ABCP (less ABCP that has been issued against Qualified ABCP and highly rated assets), $300 million, and the largest amount of ABCP outstanding against any one purchase commitment.
Finally, the required program credit enhancement was formerly provided through a combination of a surety bond of $100 million from Ambac Assurance Corp. and a program letter of credit from Bank of America. Now the program letter of credit will supply the full amount of required program enhancement. A general liquidity facility from Bank of America advances against the program letter of credit and also provides other liquidity to benefit RCC investors.
RCC's program-wide enhancement is now $750 million, while as of August 31, 2003, $5.2 billion of ABCP was outstanding.
BARCLAY'S SHEFFIELD ADDS $367.5 MILLION CREDIT CARD-BACKED NOTE
Sheffield Receivables Corp., a partially supported, multiseller conduit sponsored by Barclays Bank (Aa1/Prime-1/A-), purchased $367.5 million of Class A variable funding floating rate notes from a credit card business note trust. The note comes from a paired series that will accrete as the other series amortizes. Deal-specific enhancement for the Class A notes is in the form of subordination of no less than 26.5%. Sheffield's program credit enhancement was incrementally increased by 10% of this purchase. Sheffield is currently authorized to issue up to $23.19 billion of ABCP.
BNP PARIBAS' THESEE LIMITED PURCHASES NEW JAPANESE ASSETS FOR EURO 268 MILLION
Thesee Limited, BNP Paribas' (Aa2/Prime-1/ B+) partially supported, multiseller ABCP conduit, has subscribed to five additional series of Japanese structured notes issued by an existing issuer for a total of Euro 268 million. The purchase is fully supported by a liquidity facility provided by BNP Paribas (Aa2/Prime-1/B+). Thesee Limited's assets are comprised of thirteen asset portfolios, and 56% of Thesee's assets are trade receivable-backed transactions. The authorized amount of the program is now Euro 3.11 billion. The program-wide letter of credit available to Thesee amounts to Euro 74 million, of which Euro 26 million is available to cover credit risk on the assets.
SUNTRUST'S THREE PILLARS INCREASES PROGRAM LIMIT TO $8 BILLION
Three Pillars Funding Corp., SunTrust Bank's (Aa2/Prime-1/B+) partially supported, multiseller ABCP conduit has increased its program limit from $5 billion to $8 billion. This increase is to accommodate the continued growth of Three Pillars' outstanding commitments. Also, the floor amount of Three Pillars' program-wide credit enhancement, in the form of an irrevocable letter of credit provided by Prime-1-rated SunTrust Bank, has increased proportionately from $50 million to $80 million. Three Pillars has outstanding commitments of $4.32 billion and total program credit enhancement of $358 million.
SAVE THE DATE FOR MOODY'S & IPMA EUROPEAN ABCP CONVENTION: OCTOBER 29, 2003
Moody's Investors Service and the IPMA will hold a conference on European Asset-Backed Commercial Paper on October 29, 2003 at the Dorchester Hotel in London. For further information, please contact Moody's by e-mail on RSVP@moodys.com.
For a more detailed description of these ABCP programs, see Moody's GLOBAL ASSET-BACKED COMMERCIAL PAPER MARKET REVIEW, which is published quarterly. This information is also available at http://www.moodys.com.
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