MOODY'S DOWNGRADES 12 DKB SUPPORTED CP PROGRAMS AND 12 IBJ SUPPORTED CP PROGRAMS; ONE LOC-BACKED CP PROGRAM SUPPORTED BY LTCB IS PLACED ON REVIEW FOR POSSIBLE DOWNGRADE; AND PRIME-1 RATING OF 12 ABCP PROGRAMS CONFIRMED.
New York, 05-29-98 -- Moody's Investors Service has downgraded the Prime-1 ratings of twenty-four commercial paper programs following Moody's May 27th announcement that the short-term ratings of Dai-Ichi Kango Bank, Ltd. (DKB) and Industrial Bank of Japan, Ltd. (IBJ) have been downgraded to Prime-2 from Prime-1. Of the twenty-four commercial paper programs that were downgraded, nine were programs supported by direct-pay irrevocable letters of credit (LOC) issued by DKB and seven were issued by IBJ. Three of DKB's asset-backed commercial paper (ABCP) programs and five of IBJ's ABCP programs were downgraded.
Moody's is reviewing for possible downgrade the Prime-3 rating of Japan Leasing Finance Corporation's $300 million commercial paper program which is fully supported by a letter of credit from The Long Term Credit Bank of Japan, Limited (LTCB). On May 27th Moody's announced LTCB's Prime-3 short-term rating was placed on review for possible downgrade.
Moody's downgraded the long-term deposit and senior debt ratings of Dai-Ichi Kangyo Bank (DKB) to A3 from A1 and its BFSR to D from C. The Prime-1 rating for its short-term obligations was also lowered to Prime-2. The rating outlook is stable. These rating actions conclude the review commenced on February 13, 1998.
Moody's downgraded Industrial Bank of Japan's long-term deposit and senior debt ratings
to A3 from A2, its short-term rating to Prime-2 from Prime-1 and its BFSR to D from C.
The rating for non-cumulative preferred stock was lowered to "baa2" from "a3" in conjunction
with the adjustment of its BFSR. The rating outlook is stable. These rating
actions conclude the review commenced on March 20, 1998.
Moody's placed under review for possible downgrade the Ba1 subordinated debt
rating, the Baa3 senior debt rating and the long-term LOC obligations,
the Baa2 long-term deposit ratings, and the Prime-3 rating for short-term
deposit and short-term LOC obligations.
ASSET-BACKED COMMERCIAL PAPER PROGRAMS WITH SUPPORT FROM DKB:
The Prime-1 ratings of the following ABCP programs have been downgraded to Prime-2 because of the liquidity and/or credit support provided by DKB:
Anchor Funding Corporation
Atlas Funding Corporation
Jet Funding Corporation
LETTER OF CREDIT-BACKED TRANSACTIONS SUPPORTED BY DKB:
The Prime-1 ratings for the following commercial paper programs supported by direct-pay LOCs provided by DKB have been downgraded:
Epson America Inc., Series B
Kobe Steel International (USA), Inc.
Ridge Capital Trust II
Seiko Corporation of America
Shimizu International Finance (USA), Inc.
Shiseido International Corporation
Shoseki International Corporation
Tokyo Leasing (USA), Inc.
The Prime-1 rating assigned to Yamaha Motor Finance Corp.'s commercial paper, which is supported by a direct-pay irrevocable letter of credit provided by DKB, has been confirmed because DKB's obligations under the LOC are supported by The Chase Manhattan Bank
(Chase) through a confirmation agreement. Chase's long-term deposit rating is Aa2, its
short-term deposit rating is Prime-1 and its bank financial strength rating is B+.
ASSET-BACKED COMMERCIAL PAPER PROGRAMS WITH SUPPORT FROM IBJ:
The Prime-1 ratings of the following ABCP programs have been downgraded to Prime-2 because of the liquidity and/or credit support provided by IBJ:
Astro Capital Corporation
Industrial Funding Corporation
Tri-Lateral Capital (USA) Inc.
Working Capital Management Co., L.P.
Working Capital Management Corp. II
LETTER OF CREDIT-BACKED TRANSACTIONS SUPPORTED BY IBJ:
The Prime-1 ratings for the following commercial paper programs supported by direct-pay LOCs provided by IBJ have been downgraded:
Kajima Capital of America, Inc.
Mitsubishi Motors Credit of America Inc. (Series D)
NS Finance, Inc.
Onoda USA Inc.
Orix America Inc.
Showa Leasing (USA) Inc. (Series C)
SRD Finance Inc. I
THE FOLLOWING ABCP PROGRAMS HAVE BEEN CONFIRMED AT PRIME-1
Various ABCP programs have IBJ and/or DKB as liquidity providers, with no other
exposure to either IBJ or DKB. However, because these programs have structural
mechanisms in place, or redundant liquidity or credit enhancement, they are protected
from any adverse rating action due to these two banks being downgraded.
The ratings assigned to the following ABCP programs are, therefore, confirmed at Prime-1:
Atlantic Asset Securitization Corporation
Banner Receivables Corporation
Corporate Asset Funding Company, Inc. (CAFCO)
Corporate Receivables Corporation
Eureka Securitization Inc.
Fairway Finance Corporation
Greenwich Funding Corporation
Park Avenue Receivables Corporation
Triple-A One Funding Corp.
The Prime-1 rating for Ascot Capital Corporation has been confirmed. Even though
IBJ acts as servicer, Ascot's credit and liquidity exposure to IBJ is minimal.
For a more detailed description of the ABCP programs mentioned in this press release, see Moody's ASSET-BACKED COMMERCIAL PAPER MARKET REVIEW, which
is published quarterly.
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