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Rating Action:

Moody's assigns enhanced Aa3 to Deutsche Bank Securities, Inc. Custodial Receipts DBE-1231

Global Credit Research - 23 Jan 2014

$10M debt affected. Credit and liquidity swap provided by Deutsche Bank AG

New York, January 23, 2014 -- Moody's Rating

Issue: Ser. DBE -- 1231 CR; Rating: Aa3; Sale Amount: $10,000,000; Expected Sale Date: 1/23/14; Rating Description: Custodial Receipts

Moody's Investors Service has assigned an Aa3 rating to Deutsche Bank Securities, Inc. Custodial Receipts Series DBE-1231 (Custodial Receipts) evidencing ownership of Massachusetts Development Finance Agency Revenue Bonds, Northeastern University Issue, Series 2014 (Bonds).

SUMMARY RATING RATIONALE

The rating, based upon joint default analysis (JDA), reflects Moody's approach to rating jointly supported transactions. The JDA rating is based on the long term rating of Deutsche Bank, AG (Bank) as provider of the Credit Swap (Swap), the underlying rating of the Bonds, and the structure and legal protections of the transaction which provide for timely payment of debt service to Custodial Receipt holders. Moody's long-term issuer rating for Deutsche Bank AG is A2. Moody's underlying rating on the Bonds is A2.

Since a loss to the Custodial Receipt holders would occur only if both the Bank and Northeastern University default on Bond principal and interest payment dates, Moody's has assigned the rating based upon the joint probability of default by both parties. In determining the joint probability of default, Moody's considers the level of default dependence between the support provider and the obligor. In this case, Moody's has determined that there is a low level of default dependence between the Bank and Northeastern University. As a result, the joint probability of default for the Bank and Northeastern University results in a credit risk consistent with a JDA rating of Aa3.

WHAT COULD CHANGE THE RATING-UP

The rating of the Custodial Receipts could be upgraded if Moody's were to upgrade either the long-term issuer rating of Deutsche Bank AG or the long term underlying rating on the Bonds.

WHAT COULD CHANGE THE RATING-DOWN

The rating of the Custodial Receipts could be downgraded if Moody's were to downgrade either the long-term issuer rating of Deutsche Bank, AG or the long-term underlying rating on the Bonds or if the default dependence were to increase.

PRINCIPAL METHODOLOGY USED

The principal methodologies used in this rating were Rating Transactions Based on the Letter of Credit Substitution Approach: Letter of Credit Backed, Insured and Guaranteed Debts published in March 2013 and Moody's Rating Methodology for Tender Option Bond Programs published in October 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Michael J Loughlin
Vice President - Senior Analyst
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Thomas Vincent Jacobs
VP - Senior Credit Officer
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns enhanced Aa3 to Deutsche Bank Securities, Inc. Custodial Receipts DBE-1231
No Related Data.

 

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