JPY6.6 billion in specified loan and bonds rated provisionally
Tokyo, December 16, 2010 -- Moody's Japan K.K. has assigned (P)A3 (sf) to the
Specified Loan and Bonds financed to and issued by AMB Funabashi Tokorozawa
TMK.
The ratings address the expected loss posed to investors by the legal
final maturity. The structure allows for ultimate payments of interest
and principal by the legal final maturity.
Moody's issues provisional ratings in advance of the final sale of securities.
These ratings, however, represent Moody's preliminary credit
opinions only. Upon a conclusive review of the transaction and
associated documentation, Moody's will endeavor to assign definitive
ratings to the securities. Definitive ratings may differ from provisional
ratings. The provisional ratings are based on information received
as of Dec 15, 2010.
The complete rating actions are as follows:
Deal Name: AMB Funabashi Tokorozawa TMK
Class, Amount, Coupon, Rating, Credit Support*
Specified Loan, JPY4,000 million, Fixed, (P)A3
(sf), 0.0%
Specified Bonds, JPY2,600 million, Fixed, (P)A3
(sf), 0.0%
* The formula used to calculate the credit support in place for this
transaction:
Credit support %: A / B, where
A: Total principal amount of the debt subordinate to the rated debt
B: Total debt (JPY6.6 billion)
Scheduled Total Loan and Bonds Amount: JPY6.6 billion
Expected Interest Payments: Quarterly
Expected Closing Date: Dec 20, 2010
Expected Maturity Date: Dec 20, 2017
Legal Final Maturity Date: Dec 20, 2019
Underlying Asset: Beneficiary interests of six distribution facilities
in Tokyo Metropolitan area
Issuer/Borrower: AMB Funabashi Tokorozawa TMK
Originator: AMB Property Japan, Inc., Japan Branch,
also acting as an asset manager
Bond Purchaser and Lender: Prudential Mortgage Asset Holdings 1
Japan Investment Business Limited Partnership
Fiscal Agent: Deutsche Bank AG, Tokyo Branch (Aa3/P-1)
RATING RATIONALE
Issuer SPC will refinance existing debts with the rated Specified Loan
and Bonds. The Specified Loan and Bonds rank pari passu in terms
of payment priorities. It will use net cash flow from the underlying
properties to pay the interests on and principals of the loan and bonds.
The loan and bonds will mature in Dec 2017 with a 2-year tail-period.
The tail period gives sufficient time to liquidate the underlying properties.
The ratings are based mainly on 1) the property portfolio's quality and
competitiveness ; 2) the waterfalls at the Issuer level; 3)
the credit support as illustrated by the loan-to-value (LTV)
and stressed DSCR levels; and 4) the legal and structural integrity
of the transaction.
Moody's estimated the credit support levels for each of the rated debts
based on its estimates for the net cash flow and value of the properties,
taking into consideration the characteristics of the rated debts,
historical data on the properties, third-party reports,
performance data on existing transactions, and industry trends.
The following are Moody's LTVs and Stressed DSCRs for each rated
debt. Moody's considers these numbers appropriate for each
of the ratings.
Moody's LTV:
Total amount of the subject debt and the debt pari passu to the subject
/ Moody's Value for the underlying properties
Specified Loan: Closing, 61.2%; Balloon,
57.6%
Specified Bonds: Closing, 61.2%; Balloon,
57.6%
Moody's Stressed DSCR:
Moody's Net Cash Flow / (Total amount of the subject debt and the debt
pari passu to the subject × a 6.5% loan constant)
Specified Loan: Closing, 1.68x; Balloon,
1.78x
Specified Bonds: Closing, 1.68x; Balloon,
1.78x
The principal methodology used in this rating was Moody's "Updated:
Moody's Approach to Rating CMBS Transactions in Japan," published
on September 30, 2010, and available on www.moodys.co.jp.
In this rating process, Moody's may have considered other factors.
Moody's received third-party due diligence reports for this transaction,
which did not affect the ratings assigned.
The V Score for this transaction is Medium, which is same as the
Medium V Score assigned to the Japanese Single Borrower CMBS sector.
Moody's V scores provide a relative assessment of the quality of available
credit information and the potential variability of various inputs in
a rating determination. The V score ranks transactions by the potential
for significant rating changes owing to uncertainty about the assumptions
due to data quality, historical performance, the level of
disclosure, transaction complexity, modeling, and the
transaction governance that underlie the ratings. V scores apply
to the entire transaction, not to individual tranches.
If Moody's provides a relative assessment by stressing Moody's
Net Cash Flow and Cap Rate with regard to the underlying asset (to determine
Moody's Value, we have tested three cases, by applying 5%,
15%, or 25% value cuts respectively), the value
cuts give rise to changes in the model indicated Parameter Sensitivity
from the initial ratings to Baa1, Baa3, and Ba3 for the Specified
Loan, and Baa1, Baa3, and Ba3 for the Specified Bonds.
Parameter sensitivities are not intended to measure how the rating of
the security might migrate over time; rather, they are designed
to provide a quantitative calculation of how the initial rating might
change if key input parameters used in the initial rating process differed.
The analysis assumes that the deal has not aged, and does not factor
structural features such as a sequential payment effect. Parameter
sensitivities reflect only the ratings impact of each scenario from a
quantitative/model-indicated standpoint. Qualitative factors
are also taken into consideration in the ratings process, so the
actual ratings that would be assigned in each case could vary from the
information presented in the parameter sensitivity analysis.
The methodologies, Moody's "Updated Report on V Scores and Parameter
Sensitivities for Structured Finance Securities," published on September
30, 2010, and "V Scores and Parameter Sensitivities in the
Asian CMBS Sector," published on September 30, 2010,
are available on www.moodys.co.jp. In addition,
Moody's publishes a weekly summary of structured finance credit,
ratings, and methodologies, available to all registered users
of its website, at www.moodys.com/SFQuickCheck.
REGULATORY DISCLOSURES
For an explanation of the (sf) indicator, please see "Moody's Structured
Finance Rating Scale" on www.moodys.com.
The principal information used to prepare the credit rating comprised
historical data and third party reports on underlying asset, and
contracts.
Information sources used to prepare the credit rating are the parties
involved in the ratings; public information; and confidential
and proprietary Moody's information.
Measures taken to ensure the quality of this information include representations
and warranties, and acquisitions of third party reports, etc.
Moody's considers the quality of information available on the issuer or
obligation satisfactory for the purposes of assigning a credit rating.
Moody's encouraged rating-related entities to disclose any information
that may be pertinent to this transaction, including items described
in "Information Considered Important in Evaluating the Appropriateness
of a Credit Rating" on www.moodys.co.jp, or
to take other measures to enable third parties to verify the appropriateness
of the credit rating.
Rating-related entities have responded to us that they will not
disclose information pertinent to this transaction to third parties except
through Moody's press release.
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.
Credit ratings are 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 do not constitute investment or financial advice,
and credit ratings are not recommendations to purchase, sell,
or hold particular securities. 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.
The credit risk of an issuer or its obligations is assessed based on information
received from the issuer or from public sources. Moody's may change
the rating when it deems necessary. Moody's may also withdraw the
rating due to insufficient information, or for other reasons.
Moody's Japan K.K. is a credit rating agency registered
with the Japan Financial Services Agency and its registration number is
FSA Commissioner (Ratings) No. 2. The Financial Services
Agency has not imposed any supervisory measures on Moody's Japan K.K.
in the past year.
Please see ratings tab on the issuer/entity page on the Moody's website
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Credit Ratings were fully digitized and accurate
data may not be available. Consequently, Moody's provides
a date that it believes is the most reliable and accurate based on the
information that is available to it. Please see the ratings disclosure
page on the Moody's website for further information.
Please see the Credit Policy page on the Moody's website for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Tokyo
Mitsuru Sukigara
Vice President - Senior Analyst
Structured Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Tokyo
Tetsuji Takenouchi
Senior Vice President - Team Leader
Structured Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Moody's Japan K.K.
Atago Green Hills Mori Tower 20fl
2-5-1 Atago, Minato-ku
Tokyo 105-6220
Japan
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Moody's assigns provisional ratings to AMB Funabashi Tokorozawa TMK's Specified Loan & Bonds
