Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone
Tokyo, July 29, 2009 -- Moody's Investors Service announced today that it has downgraded to Aa1 from Aaa the Class 3 trust certificates of the Tokyo Metropolitan CLO Ninth transaction. The trust certificates had been under review for possible downgrade since May 19, 2009. At the same time, Moody's says that it has affirmed the ratings of all other outstanding classes of the following Japanese regional government-related SME CLO transactions: - Tokyo Supporters CLO Special Purpose Company, - Ordinance-Designated Cities CLO Fourth, - Santoshi CLO2009, - Yontoshi CLO2 Tokutei Mokuteki Kaisha, - Santoshi CLO 2009 Tokutei Mokuteki Kaisha, and - Class 1A, 1B, 1C and 2 of Tokyo Metropolitan CLO Ninth These transactions are CLO backed by corporate loans extended to SMEs. Their underlying loans are either fully guaranteed (Tokyo Supporters CLO Special Purpose Company only), or 80% guaranteed by the Credit Guarantee Corporation ("CGC") on a loan-by-loan basis. Under the credit insurance system, the guarantee obligation of CGC is insured by the Japan Finance Corporation ("JFC") to as much as 70-80% of the guaranteed amount. The relevant regional governments compensate those CGC guarantee obligations which exceed JFC's insured amounts. Specified Bonds issued by Yontoshi CLO2 Tokutei Mokuteki Kaisha is backed by Class 1 trust certificates issued under Tokyo Metropolitan CLO Ninth and Ordinance-Designated Cities CLO Fourth. Specified Bonds issued by Santoshi CLO 2009 Tokutei Mokuteki Kaisha is backed by Class 1 trust certificates issued under Santoshi CLO2009. Moody's says that today's rating actions reflect the rating actions taken against Metropolis of Tokyo, Osaka City Government, and JFC. On July 28, 2009, Metropolis of Tokyo and Osaka City Government were downgraded to Aa2 from Aa1 (domestic currency), and on July 22, 2009, JFC was downgraded to Aa2 from Aaa. Metropolis of Tokyo, Osaka City Government, and JFC had been under review for possible downgrade since May 18, 2009. In conjunction with the consideration of guarantor credit changes, Moody's also considered the current underlying pool performance of each transaction. Specifically, for Tokyo Supporters CLO, the actual default rate was higher than our initial expected. As described above, the ability of CGC to perform its guarantee obligation strongly relies on the credit quality of the relevant regional governments as well as JFC. However, the downgrade of their ratings to Aa2 and the changes in the performance of the portfolios only has a limited impact on all Aaa ratings except for the Class 3 of Tokyo Metropolitan CLO Ninth Transaction, hence those ratings are affirmed. On the other hand, for Class 3 of Tokyo Metropolitan CLO Ninth, the credit enhancement is not sufficient to support a Aaa rating relative to the current stressed loss rate in combination with the consideration of guarantor's current credit assessment. As a result, the rating of the trust certificates was downgraded to Aa1 from Aaa. At the same time, for Class 3 of same series (Ordinance-Designated Cities CLO Fourth and Santoshi CLO2009), its Aa1 ratings were affirmed. The principal methodologies used in rating these transactions were "Japan's SME CDOs: Focal Points in Rating Analysis and Monitoring," "Repackaged Securities (October 2001)," and "Moody's Refines Its Approach to Rating Structured Notes (July 1997)," which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Credit Policy & Methodologies directory. Today's rating actions follow: Tokyo Supporters CLO Special Purpose Company: (1) Series 1 Class B JPY13,800,000,000 Specified Bonds due November 2010, Aaa affirmed; previously on March 9, 2005, assigned Aaa (2) Series 1 Class C JPY4,300,000,000 Specified Bonds due November 2010, Aaa affirmed; previously on October 11, 2007, upgraded to Aaa from Aa1 Tokyo Metropolitan CLO Ninth: (3) Class 1A JPY753,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (4) Class 1B JPY753,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (5) Class 1C JPY753,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (6) Class 2 JPY16,768,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (7) Class 3 JPY8,684,000,000 Trust Certificates, Downgraded to Aa1 from Aaa; previously on May 19, 2009, Aaa placed under review for possible downgrade Ordinance-Designated Cities CLO Fourth: (8) Class 1A JPY247,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (9) Class 1B JPY247,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (10) Class 1C JPY247,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (11) Class 2 JPY7,885,000,000 Trust Certificates, Aaa affirmed; previously on March 4, 2008, assigned Aaa (12) Class 3 JPY3,971,000,000 Trust Certificates, Aa1 affirmed; previously on March 4, 2008, assigned Aa1 Santoshi CLO2009: (13) Class 1A JPY200,000,000 Trust Certificates, Aaa affirmed; previously on March 12, 2009, assigned Aaa (14) Class 1B JPY200,000,000 Trust Certificates, Aaa affirmed; previously on March 12, 2009, assigned Aaa (15) Class 1C JPY200,000,000 Trust Certificates, Aaa affirmed; previously on March 12, 2009, assigned Aaa (16) Class 2 JPY5,085,000,000 Trust Certificates, Aaa affirmed; previously on March 12, 2009, assigned Aaa (17) Class 3 JPY3,902,000,000 Trust Certificates, Aa1 affirmed; previously on March 12, 2009, assigned Aa1 Yontoshi CLO2 Tokutei Mokuteki Kaisha: (18) Series 1 Class A JPY1,000,000,000 Specified Bonds, Aaa affirmed; previously on March 4, 2008, assigned Aaa (19) Series 1 Class B JPY1,000,000,000 Specified Bonds, Aaa affirmed; previously on March 4, 2008, assigned Aaa (20) Series 1 Class C JPY1,000,000,000 Specified Bonds, Aaa affirmed; previously on March 4, 2008, assigned Aaa Santoshi CLO 2009 Tokutei Mokuteki Kaisha: (21) Series 1 Class A JPY 200,000,000 Specified Bonds, Aaa affirmed; previously on March 12, 2009, assigned Aaa (22) Series 1 Class B JPY 200,000,000 Specified Bonds, Aaa affirmed; previously on March 12, 2009, assigned Aaa (23) Series 1 Class C JPY 200,000,000 Specified Bonds, Aaa affirmed; previously on March 12, 2009, assigned Aaa Moody's Investors Service is a publisher of rating opinions and research. It is not involved in the offering or sale of any securities, nor is it acting on behalf of the offering party. This release is not a solicitation or a recommendation to buy, hold, or sell securities. Tokyo Shinji Yoshizawa Analyst Structured Finance Group Moody's Japan K.K. JOURNALISTS: (03) 5408-4110 SUBSCRIBERS: (03) 5408-4100
You must be logged in to post a comment Login