Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's assigns Prime-1/Aaa ratings to Nuveen VRDP Shares of CA, NY and National Closed-End Funds

24 Jun 2010

Approximately $500.5 million in Variable Rate Demand Preferred Shares ("VRDP") issued to replace existing VRDP securities of four closed-end funds

New York, June 24, 2010 -- Moody's Investors Service has assigned Prime-1/Aaa ratings to VRDP Nuveen Shares of CA, NY and National Closed-End-Funds, as follows:

• Nuveen Dividend Advantage Municipal Fund 2 (NXZ) 1,960 shares, $196 million

• Nuveen Insured New York Dividend Advantage Municipal Fund (NKO) 500 shares, $50 million

• Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX) 355 shares, $35.5 million

• Nuveen Insured Premium Income Municipal Fund 2 (NPX) 2,190 shares, $219 million

Each of the funds listed above will be exchanging newly created VRDP shares for currently outstanding VRDP shares. The new VRDP shares will have revised repayment terms and conditions in the liquidity purchase agreement between each of the funds and the liquidity provider but with no impact as to credit quality for investors in the VRDP shares.

The short-term ratings, which address Moody's expectation of timely payment of principal (liquidation preference) and accumulated dividends of the VRDP shares in the event of an optional or mandatory tender, are based upon the VRDP shares liquidity purchase agreement and liquidity provider, Deutsche Bank AG, New York Branch (currently rated Aa3/P-1). Moody's Prime-1 rating assigned to the VRDP shares reflects a view on the certainty of timely repayment on demand with seven days notice.

Moody's long-term ratings assigned to the Variable Rate Demand Preferred Shares reflect an assessment of the underlying fund's ability to make regular dividend payments and mandatory redemption payments at final maturity or, if necessary, to cure an asset coverage breach. Both Moody's coverage ratios as well as the Investment Company Act of 1940 (1940 Act) coverage ratios are all substantially in excess of the preferred share obligations. The organization of the funds and portfolio investment practices represent additional qualitative positives that are factored into the ratings.

Unconditional Nature of the Demand Feature/VRDP Purchase Agreement

The Prime-1 ratings reflect Moody's assessment that VRDP share holders will be able to tender their shares unconditionally to Deutsche Bank, the liquidity provider. The liquidity provider agrees to purchase the rated shares that are not successfully remarketed, on any business day with a 7-day tender notice for sale. As such, Moody's short-term ratings associated with the VRDP shares are linked to the creditworthiness of the liquidity provider and may change whenever the short-term rating of the bank is changed or if the liquidity provider itself changes. The VRDP purchase agreement has no automatic termination events or conditions precedent to funding, making it an unconditional agreement to purchase unremarketed shares. The Prime-1 rating will expire with the termination of the VRDP Shares purchase agreement, currently scheduled for approximately 14 months from the settlement date of the respective exchanges. Moody's notes that there are mandatory tender events which are automatic to address "roll over" risk of the liquidity purchase agreement. The occurrence of these events would put in motion a process whereby VRDP shares are deemed to be tendered.

Included in the mandatory tender events are the following: monthly missed dividend, downgrade of the liquidity provider's short term rating to Prime-3, failure to pay monthly liquidity provider fee (if declared a mandatory tender event by the liquidity provider), obtainment of an alternate purchase agreement, declaration of a special rate period, breach of the effective leverage covenant referred to below continued for 60 days (if declared a mandatory tender event by the liquidity provider) and the occurrence of an extraordinary corporate event of the liquidity provider. If a mandatory tender for a remarketing event eventually results in a failed remarketing, then the liquidity provider is unconditionally obliged to purchase the unremarketed VRDP shares.

Once tendered, either through an optional or a mandatory tender, the liquidity provider is obligated to purchase the VRDP shares if the shares cannot be successfully remarketed. Such obligation is unconditional and irrevocable. The liquidity provider also has a mandatory purchase obligation with respect to all outstanding VDRP shares upon termination of the VRDP shares purchase agreement. In the event the liquidity provider purchases VRDP shares, the liquidity provider and any other holders of the VRDP shares are entitled to earn dividends stepped-up to the full maximum rate, calculated as a spread to a base rate which escalates over time.

VRDP shareholders will have the option to tender their VRDP shares for remarketing and purchase seven days after delivery of the notice of tender. The remarketing agent will use its best efforts to remarket any VRDP shares so tendered. In the event no remarketing occurs on or before the relevant purchase date, or VRDP shares remain unsold pursuant to an attempted remarketing, the tender and paying agent will deliver all unsold VRDP shares to the liquidity provider for purchase on such purchase date.

Newly issued VRDP shares will replace previous VRDP issued in August 2008. Rated leverage levels, consisting of senior securities within each of the four funds along with economic leverage, including rated leverage in addition to leverage through the use of Tender Option Bonds, is expected to remain in line with current levels after the existing VRDP securities are refinanced. These range from a low of 35% to 38%. Moody's notes that asset coverage tests and redemption provisions will also constrain "effective" leverage levels. In parallel, over the life of the VRDP purchase agreement with Deutsche Bank, the funds will adhere to an asset coverage test which mandates that each fund delever to the extent required to comply with the asset coverage test .

Long Term Ratings Assigned to VRDP Shares Aligned with Overcollateralization of Preferred Shares

Moody's Aaa long-term ratings assigned to the VRDP shares reflect each fund's modest leverage, Moody's strong coverage ratios combined with asset maintenance procedures which require funds to delever in the event the discounted values of portfolio assets decline below the preferred share liquidation preference amounts or applicable redemption price plus accumulated and projected dividend payments and certain fund expenses in order to maintain rating levels. This is in addition to redemption requirements which supplement the 1940 Act.

In addition, the liquidity profile of each portfolio is consistent with the collateral discount factors that seek to simulate pricing stress in the event of a forced liquidation of assets to meet a mandatory redemption. In this connection, Moody's historical asset coverage levels for each fund, since their inception, have generally not declined below Moody's minimum basic maintenance amounts. The credit quality of portfolio assets and investment strategies to diversify by issuer and sector also support asset coverage levels.

At the same time, 1940 Act asset coverage ratios, presently at or above 300%, have consistently been maintained above threshold levels by each fund since the original issuance of preferred stock. Given these levels of overcollateralization and the types of assets owned by the funds, the Aaa ratings reflect Moody's view that the funds will pay in full liquidation preference amounts plus dividends and certain fund expenses upon redemption, either due to a mandatory or voluntary redemption, including the distribution of fund assets upon liquidation in approximately 30 years from the settlement date of the respective exchanges.

That said, Moody's long-term ratings may be downgraded if asset coverage levels decline or in the event future changes to any of the funds' capital structures are deemed to restrict a fund's ability to meet dividends as well as preferred share optional or mandatory redemptions.

At the time of their issuance, asset coverage levels for each of the funds are, as follows:

Moody's (>1.0x) 1940 Act (>2.0x)

• Nuveen Dividend Advantage Municipal Fund 2 (NXZ): 1.54x and 3.44 x

• Nuveen Insured NewYork Dividend Advantage Municipal Fund (NKO): 1.39x and 3.57x

• Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX): 1.47x and 3.57x

• Nuveen Insured Premium Income Municipal Fund 2 (NPX): 1.55x and 3.57x

Nuveen Asset Management is the fund's investment adviser, responsible for determining the fund's overall investment strategy. Nuveen Investments and its affiliates had approximately $145 billion of assets under management as of December 31, 2009, of which approximately $69.0 billion was in municipal securities.

Moody's ratings of preferred shares address the full, liquidation preference amount payable upon optional, mandatory, or term redemption, including the distribution of fund assets upon liquidation. The rating approach uses asset-specific advance rates over a predetermined short-time horizon to calculate the market value risk of the fund's investment portfolio as a whole for structures with triggers that cause partial or full liquidation of the investment pool.

The credit ratings assigned to preferred stock issued by these funds were evaluated using factors we believe to be relevant to the credit profile of each issuer, such as the objectives of the fund, its strategies for achieving its objectives, and the management characteristics of its sponsor.

These attributes are compared against those of other funds and these ratings are believed to be comparable to ratings assigned to preferred stock issued by closed end funds of similar risk.

The assigned ratings are opinions on the expected losses associated with the security if the fund were to be liquidated in a stress scenario. The ratings also address the likelihood of timely payment of dividends as well as liquidation preference upon redemptions. In the rating assigned to VRDP shares, Moody's would view an extension of the mandatory term redemption date (June 1, 2040 for the new VRDP shares) as a breach of offering terms having negative implications for the rating.

The last rating actions taken with respect to VRDP shares issued by the following funds occurred when ratings of Prime-1 and Aaa were originally assigned by Moody's to these tranches on August 6, 2008:

• Nuveen Dividend Advantage Municipal Fund 2 (NXZ)

• Nuveen Insured New York Dividend Advantage Municipal Fund (NKO)

• Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX)

• Nuveen Insured Premium Income Municipal Fund 2 (NPX)

New York
Martin Duffy
VP - Senior Credit Officer
Global Managed Investments
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Daniel Serrao
Senior Vice President
Global Managed Investments
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns Prime-1/Aaa ratings to Nuveen VRDP Shares of CA, NY and National Closed-End Funds
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.