Hong Kong, March 01, 2010 -- Moody's states that the minimum liquidity protection for Singapore
CMBS transactions should be no less than 6 months
Moody's Investors Service says in a new report that the minimum
liquidity protection in Singapore CMBS transactions should be sufficient
to cover the senior payment obligations of the CMBS issuer for a period
equal to the longer of 1) six months or 2) one payment period.
"This minimum liquidity protection is important so that the CMBS
issuer can meet its payment obligations in a timely manner,"
says Jerome Cheng, a Moody's vice president and author of
the report, adding, "This minimum liquidity protection
is premised on the transaction characteristics, and the legal and
operational risks of Singapore CMBS transactions."
The minimum liquidity protection is based on results of 'Request
for Comment: Singapore CMBS Liquidity Sufficiency',
which was published last November to solicit feedback from market participants.
Actual liquidity protection will be analyzed based on the merits of the
individual transaction. "Moody's would consider greater
liquidity protection for transactions with more embedded risks,"
Cheng adds.
"To ensure rating consistency across all Singapore CMBS transactions,
these new guidelines are applicable to all the future and existing transactions,"
Cheng explains, adding, "The rating of a transaction
lacking sufficient liquidity will be linked to the rating of the sponsoring
S-REIT. The degree of rating linkage will be subject to
the existing liquidity arrangement, the S-REIT's profile,
and the remaining term to maturity."
After considering the liquidity protection present in the existing deals,
Moody's has put three CMBS transactions on review for possible downgrade
because of their lack of relevant liquidity reserve, and affirmed
the ratings of another three.
The three transactions with ratings on review for downgrade are:
Issuer: Silver Maple Investment Corporation Ltd
....U.S.$72,100,000
Series 018 Floating Rate Notes due December 2011, Aaa Placed Under
Review for Possible Downgrade; previously on Jun 12, 2009 Affirmed
Aaa
....U.S.$255,500,000
Series 025 Floating Rate Notes due April 2014, Aaa Placed Under
Review for Possible Downgrade; previously on Jun 12, 2009 Affirmed
Aaa
....175,000,000 Series 030
Floating Rate Notes due April 2014, Aaa Placed Under Review for
Possible Downgrade; previously on Jun 12, 2009 Affirmed Aaa
Issuer: Orion Prime Ltd.
....186,200,000 Series P1-AAA-001
Class AAA Secured Floating Rate Notes due March 2012, Aaa Placed
Under Review for Possible Downgrade; previously on Aug 25,
2008 Affirmed Aaa
Issuer: Star Topaz Limited
....S$260,000,000 Secured
Floating Rate Notes due Jan 2013, Aaa Placed Under Review for Possible
Downgrade; previously on Sep 19, 2006 Definitive Rating Assigned
Aaa
The three transactions with ratings affirmed are:
Issuer: Blossom Assets Ltd.
....80,400,000 Series 1
-- Tranche A Secured Floating Rate Notes due Nov 2012, affirmed
Aaa; previously on May 17, 2006 Definitive Rating Assigned
Aaa
....15,000,000 Series 1
-- Tranche B Secured Floating Rate Notes due Nov 2012, affirmed
Aa3; previously on May 17, 2006 Definitive Rating Assigned
Aa3
Issuer: Silver Oak Ltd.
.... U.S.$427,000,000
Class A1 Secured Floating Rate Notes due Sep 2013, affirmed Aaa;
previously on Sep 14, 2006 Definitive Rating Assigned Aaa
....30,000,000 Class A2
Secured Floating Rate Notes due Sep 2013, affirmed Aaa; previously
on Sep 14, 2006 Definitive Rating Assigned Aaa
....U.S.$86,500,000
Class B Secured Floating Rate Notes due Sep 2013, affirmed Aa2;
previously on Sep 14, 2006 Definitive Rating Assigned Aa2
Issuer: Emerald Assets Ltd.
.... 197,500,000 Series
P1-AAA-002 Secured Floating-Rate Notes due Nov 2015,
affirmed Aaa; previously on May 14, 2007 Definitive Rating
Assigned Aaa
Moody's will discuss with the S-REIT sponsors of each of
the transactions whose ratings are on review for possible downgrade and
analyze the transaction specifics on a deal-by-deal basis.
We expect to conclude our rating action within the next three months.
Moody's will continue to monitor any future development of bankruptcy
proceedings against S-REITs in Singapore and update these guidelines
as relevant.
The report, entitled, 'Moody's Approach to Evaluating
Singapore CMBS Liquidity Arrangement,' is available at www.moodys.com.
The principal methodologies used in rating and monitoring the transactions
are "Moody's Approach to Rating Large Loan/Single Borrower Transactions"
(July 2000) and "Moody's Approach to Evaluating Singapore CMBS Liquidity
Arrangement" (February 2010), which can be found at www.moodys.com
in the Research & Ratings directory, in the Rating Methodologies
subdirectory.
Other methodologies and factors that may have been considered in the process
of rating this issue can also be found in the Rating Methodologies subdirectory.
Moody's also publishes a weekly summary of structured finance credit,
ratings and methodologies, available to all registered users of
our website, at www.moodys.com/SFQuickCheck.
*****
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Hong Kong
Jerome Cheng
VP - Senior Credit Officer
Structured Finance Group
Moody's Asia Pacific Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (852) 3551-3077
Hong Kong
Marie Lam
VP - Senior Credit Officer
Structured Finance Group
Moody's Asia Pacific Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (852) 3551-3077
Moody's states that the minimum liquidity protection for Singapore CMBS transactions should be no less than 6 months