Approximately USD 37 billion of Commercial Paper affected
New York, June 22, 2012 -- Moody's Investors Service has downgraded to Prime-2 (sf) the ratings
of 7 US asset-backed commercial paper (ABCP) programs and to Prime-2
the ratings of 4 US letter of credit (LOC) backed ABCP programs.
This announcement follows Moody's decision to downgrade the ratings of
several US and European banks, as announced on 21 June 2012.
This rating action concludes the rating review initiated on February 16,
2012. For full details, please refer to the webpage containing
all of Moody's related announcements: http://www.moodys.com/eusovereign.
Please click on this link http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF289984
for the List of Affected Credit ratings. This list is an integral
part of this Press Release and identifies each affected issuer.
RATINGS RATIONALE
Today's rating announcement was prompted by Moody's recent decision to
downgrade the short term ratings of the financial institutions that act
as liquidity and/or credit support providers for the affected programs.
These parties have obligations in certain circumstances to provide funds
which would be used to repay maturing ABCP. The rating of each
program is therefore directly correlated with the rating of the support
provider.For bank-sponsored programs, the sponsor
is not only the main or sole liquidity provider, but also plays
various roles in the programme, such as those of administrator,
hedging agent and hedging counterparty or account bank.
Below is a summary rating rationale for each group of affected programs
split par sponsoring entity.
KEY RATING RATIONALE PER ISSUER
Citibank Sponsored ABCP Programs
The short-term ratings of CAFCO, LLC ("CAFCO"), CHARTA,
LLC ("CHARTA"), CIESCO, LLC ("CIESCO"), CRC Funding,
LLC ("CRC"), and GOVCO, LLC ("GOVCO"), five multiseller
ABCP programs administered by Citibank, N.A. ("Citibank",
A3/P-2/D+) are downgraded to Prime-2 (sf). The
Aaa (sf) rating of GOVCO's MTNs has been downgraded to A3 (sf).
The ratings of CAFCO, CHARTA, CIESCO, CRC and GOVCO
are directly linked to the ratings of their liquidity provider,
Citibank. Additionally, Citibank provides program wide credit
enhancement to CAFCO, CHARTA, CIESCO and CRC.
GOVCO also has the ability to issue medium term notes (MTNs). The
MTNs are not maturity matched to the underlying assets, so the timely
repayment depends on liquidity provided by Citibank.
Royal Bank of Scotland Sponsored ABCP Programs
The short-term ratings of Amsterdam Funding Corporation ("Amsterdam")
and Windmill Funding Corporation ("Windmill"), two multiseller
ABCP programs administered by Royal Bank of Scotland ("RBS", A3/P-2/D+)
are downgraded to Prime-2 (sf).
The ratings of Amsterdam and Windmill are directly linked to the rating
of RBS as program liquidity provider and program credit enhancement provider.
RBS also acts as administrator.
Letter of Credit Backed Programs
The following letter of credit backed programs are all downgraded to Prime-2:
Axis Bank Limited, $200 Million USCP Program
Axis Bank Limited's $200 million U.S. commercial
paper program is supported by an irrevocable letter of credit provided
by Bank of America, N.A. (A3/P-2/D+) Bank
of America's letter of credit provides full support for the payment of
commercial paper notes at maturity. The commercial paper notes
are issued through the bank's Dubai International Financial Centre ("DIFC")
branch.
Axis Bank Limited, $240 Million USCP Program
Axis Bank Limited's $240 million U.S. commercial
paper program is supported by an irrevocable, direct-pay
letter of credit provided by Citibank, N.A. (A3/P-2/D+)
Citibank's letter of credit provides full and timely support for the repayment
of commercial paper notes at maturity. The commercial paper notes
are issued through the bank's Dubai International Financial Centre ("DIFC")
branch.
ICICI Bank Limited, $650 Million USCP Program
ICICI Bank Limited's $650 million U.S. commercial
paper program is supported by an irrevocable letter of credit issued by
Bank of America, N.A.(A3/P-2/D+) Bank
of America's letter of credit provides full and timely support for the
repayment of commercial paper notes at maturity. The program issues
commercial paper notes through three different banking units of the bank:
Series A by the Bahrain Branch, Series B by the Hong Kong Branch,
and Series C by the New York Branch. All three series are fully
supported by a single letter of credit provided by Bank of America.
MLTC Funding, Inc., $5.1 million USCP
Program
MLTC Funding Inc.'s $5.1 U.S. commercial
paper program is supported by a letter of credit issued by Citibank,
N.A.(A3/P-2/D+) Citibank's irrevocable letter
of credit provides full and timely payment of commercial paper notes at
maturity.
PRINCIPAL METHODOLOGY
The methodologies used in these ratings were Moody's Approach to Rating
Asset-Backed Commercial Paper published in May 2012. Please
see the Credit Policy page on www.moodys.com for a copy
of this methodology.
REGULATORY DISCLOSURES
Please click on this link http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF289984
for the List of Affected Credit Ratings. This list is an integral
part of this Press Release and provides, for each of the credit
ratings covered, Moody's disclosures on the following items:
• Releasing Office
The Global Scale Credit Ratings on this press release that are issued
by one of Moody's affiliates outside the EU is endorsed by Moody's
Investors Service Ltd., One Canada Square, Canary Wharf,
London E 14 5FA, UK, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that has issued a particular Credit Rating is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant 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 relevant 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 relevant 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.
Information sources used to prepare the ratings are the following :
parties involved in the ratings and confidential and proprietary Moody's
Investors Service information.
Moody's did not receive or take into account a third party assessment
on the due diligence performed regarding the underlying assets or financial
instruments related to the monitoring of these transactions in the past
six months for Govco Incorporated, Amsterdam Funding Corporation,
CAFCO, LLC, CHARTA, LLC, CIESCO, LLC (formerly
CITICO), CRC Funding, LLC, Windmill Funding Corporation.
Moody's considers the quality of information available on the rated
entities, obligations or credits satisfactory for the purposes of
issuing these ratings.
Moody's adopts all necessary measures so that the information it
uses in assigning the ratings 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.
The below contact information is provided for information purposes only.
Please see the issuer page on www.moodys.com for Moody's
regulatory disclosure of the name of the lead analyst and the office that
has issued the credit rating.
Please see the ratings disclosure page on www.moodys.com
for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com
for information on (A) MCO's major shareholders (above 5%) and
for (B) further information regarding certain affiliations that may exist
between directors of MCO and rated entities as well as (C) the names of
entities that hold ratings from MIS that have also publicly reported to
the SEC an ownership interest in MCO of more than 5%. A
member of the board of directors of this rated entity may also be a member
of the board of directors of a shareholder of Moody's Corporation;
however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating Process
page on www.moodys.com for further information on the meaning
of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history.
The date on which some ratings were first released goes back to a time
before Moody's 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 our website www.moodys.com for further information.
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.
Everett Rutan
Senior Vice President
Structured 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
Claire?M.?Robinson
MD-US and Amer Securitization
Structured 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 downgrades 7 US ABCP programs and 4 ABCP LOC programs
