MOODY'S PLACES INDUSTRIAL BANK OF JAPAN ABCP PROGRAMS ON REVIEW FOR POSSIBLE DOWNGRADE
New York, 03-25-98 -- Moody's Investors Service placed the Prime-1 ratings of five asset-backed commercial paper (ABCP) programs, and seven structured commercial paper programs supported by direct pay irrevocable letters of credit from Industrial Bank of Japan, Ltd. (IBJ), on review for possible downgrade. Mary Dierdorff, a senior vice president in Moody's structured finance group, said the review follows Moody's March 20 announcement that it is reviewing IBJ's short-term rating for possible downgrade.
RATINGS UNDER REVIEW: The five ABCP programs (see list below) are fully supported by IBJ. The other seven programs are negatively affected because they are fully supported by IBJ letters of credit.
The ratings for the following programs are affected:
ABCP PROGRAMS (all rated Prime-1)
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 (all rated Prime-1)
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
Numerous ABCP programs have IBJ as a liquidity provider, with no other exposure to IBJ. However, because these programs have various structural mechanisms in place, they are protected from any adverse rating action due to IBJ's being placed on review for downgrade. The ratings assigned to the following ABCP programs are, therefore, confirmed at Prime-1.
The following ten ABCP programs have sufficient liquidity support from Prime-1-rated financial institutions, excluding any liquidity provided by IBJ. Because there is redundant liquidity, we have confirmed their Prime-1 ratings.
Corporate Asset Funding Company, Inc. (CAFCO)
Eureka Securitization Inc.
Corporate Receivables Corporation
Park Avenue Receivables Corporation
Receivables Capital Corporation
AESOP Funding Corp.
Triple-A One Funding Corp.
The Prime-1 rating for Ascot Capital Corporation has been confirmed eventhough IBJ acts as servicer. Ascot's credit and liquidity exposure to IBJ is minimal.
The following three ABCP programs have program credit enhancement that is drawable to pay maturing ABCP for any reason, which is in an amount greater than the amount of liquidity provided by IBJ.
Clipper Receivables Corporation
Galleon Capital Corporation
Greenwich Funding Corporation
The following three programs have Prime-1-rated banks that are already fronting for the IBJ exposure.
Banner Receivables Corporation
Fairway Finance Corporation
Atlantic Asset Securitization Corporation
These last three ABCP programs are in the process of replacing IBJ with other Prime-1-rated liquidity.
International Securitization Corporation
Fingerhut Owner Trust
Republic Funding Corporation
REVIEW OF IBJ'S RATINGS: Moody's review of IBJ's short-term and long-term ratings will focus on the potential impact of increasing credit sensitivity and widening credit spreads on the bank's net interest margins and core profitability; the possible implications of public scrutiny arising from the publicized scandals on the bank's franchise; and IBJ's exposure to borrowers in troubled East Asian economies.
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