Axes II Y20.4B Senior Notes Rated By Fitch IBCA.NEW YORK--(BUSINESS WIRE)--June 4, 1999-- Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals assigns its `AA' rating to Axes Global Fixed Income II Ltd.'s Y20.4 billion senior notes, due June 2001. The Y1.5 billion junior class B-1 notes and the U.S.$38.5 million junior class B-2 notes are unrated. The rating addresses the likelihood that investors in the senior notes will receive timely interest and principal payments denominated in Japanese Yen according to the terms of the issue. The rating reflects the structure of the transaction, the high quality and liquidity of Axes II's assets, the adequacy of the currency swap Currency Swap A swap that involves the exchange of principal and interest in one currency for the same in another currency. Notes: Currency swaps were originally done to get around the problem of exchange controls. agreement, and the credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing provided by overcollateralization. The rating also reflects the quality of the investment policies, restrictions, and guidelines of Axes II. Fitch IBCA's ratings process included a review of the issuer, an assessment as to the credit quality and market risk of the collateral securities, and the portfolio management capabilities of the investment manager. The proceeds of the notes will be used to purchase a diversified investment portfolio, consisting primarily of U.S. dollar denominated mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. . At least 90% of the portfolio assets will be investments issued or guaranteed by the U.S. government and its agencies and private sector collateralized mortgage obligations Collateralized mortgage obligation (CMO) A security backed by a pool of pass-through rates , structured so that there are several classes of bondholders with varying maturities, called tranches. (CMOs) backed by such investments, with CMO CMO See: Collateralized mortgage obligation CMO See collateralized mortgage obligation (CMO). derivatives limited to no more than 50% of the portfolio. In no event will the portfolio hold securities rated less than 'AAA'. In addition, the portfolio will have a minimum duration of -1.5 years and a maximum duration of 1.5 years. The portfolio manager may leverage the portfolio through the use of reverse repurchase agreements and other leveraging techniques, subject to the senior note subordination requirement. Axes II entered into a currency swap agreement with Morgan Guaranty Trust Co. of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (the currency swap counterparty). The currency swap is structured to give the Axes II sufficient Japanese Yen on the senior note maturity date to pay the principal amount of the senior notes and to give the Axes II sufficient Japanese Yen to make payments of interest on the senior notes on each payment date, provided that on each date Axes II makes the required payment to the currency swap counterparty. The investment manager, Clinton Group, Inc. (CGI CGI in full Common Gateway Interface. Specification by which a Web server passes data between itself and an application program. Typically, a Web user will make a request of the Web server, which in turn passes the request to a CGI application program. ), will purchase and sell all investments for the portfolio on behalf of the issuer, Axes Global Fixed Income II Ltd., which is a special purpose company incorporated under the laws of the Cayman Islands. CGI is an independent investment management firm with approximately $1.3 billion in assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. and specializing in the management of fixed-income portfolios comprising mortgage-backed securities. CGI will manage the portfolio in accordance with specific investment policies, restrictions, and guidelines approved by Fitch IBCA. To ensure accurate value of the portfolio, the issuer will perform daily valuations. |
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