MOODY'S ASSIGNS Aaa AND PRIME-1 CREDIT RATINGS TO THE MTN AND CP PROGRAMMES OF SIGMA FINANCE CORPORATION AND SIGMA FINANCE, INC.
London, 02-15-95 -- Moody's Investors Service has assigned long term credit ratings of Aaa and short term credit ratings of Prime-1, to the Euro Medium Term Note Programme of Sigma Finance Corporation, and to the U.S. Medium Term Note Program of Sigma Finance, Inc, its wholly owned subsidiary. Sigma Finance Corporation's Euro-Commercial Paper Programme has been awarded a Prime-1 short term credit rating, as have the short term U.S. promissory notes of Sigma Finance, Inc. All of the programmes are privately placed.
Sigma Finance Corporation ("SFC") is a limited purpose investment company, that purchases diversified eligible investment grade assets with the proceeds of the programmes. The management of these investment, funding and hedging activities have been contracted to Gordian Knot Limited under an investment management contract. Capital notes and equity issued by SFC provide additional funds for investment and credit enhancement for investors in the rated notes.
Moodys stated that the ratings assigned to SFC's programmes were based on : (1) The eligibility criteria for assets purchased by SFC; (2) the sufficiency of the overcollateralisation provided by the capital notes and equity, which is calculated daily on a marked to market basis, according to various discount factors relating to the composition of the portfolio; (3) interest rate and currency hedging requirements that aim to limit exposure to a narrow tolerance range; (4) the provision of partial liquidity backstop facilities by various Prime-1 rated banks and the inclusion of various highly liquid securities within the investment portfolio. Deutsche Bank AG London is the agent bank for the largest of the backstop facilities; (5) the experience of the senior management and directors of Gordian Knot, and the experience of the two Gordian directors appointed by D.B. UK Finance Plc, and their role in the auditing and control process; and, (6) the defeasence process whereby the asset portfolio is liquidated or run off under the control of the security trustee, (Bankers Trustee Company), if various enforcement events occur. These include the loss of the Aaa or Prime-1 ratings on the programmes, or breaches of the overcollateralisation, liquidity or hedging tests that are not remedied within a cure period, that is typically five days.
The ratings of Sigma Finance Inc's promissory notes and medium term notes are based on an unconditional, irrevocable guarantee from SFC, and on a lien on the assets of SFC ranking pari passu with that securing SFC's own rated obligations.
Sigma Finance Corporation is incorporated in the Cayman Islands, while its wholly owned subsidiary Sigma Finance, Inc. is incorporated in Delaware. Gordian Knot Limited is based in London and is owned by its management, by D.B. UK Finance Plc and by Fayez Sarofim & Co. D.B. UK Finance Plc is a wholly owned UK subsidiary of Deutsche Bank AG which is itself headquartered in Frankfurt.
To reserve a copy of Moody's forthcoming New Issue Report on Sigma Finance Corporation, contact Karin Seith at 071 772 5454.
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