CDC Funding Corporation Rated `AAA' By Fitch.Business Editors NEW YORK--(BUSINESS WIRE)--Aug. 21, 2001 Fitch assigns a counterparty rating of `AAA' long-term and `F1+' short-term to CDC See Control Data, century date change and Back Orifice. CDC - Control Data Corporation Funding Corporation (CDCFC), a U.S. based, wholly-owned subsidiary 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 domiciled dom·i·cile n. 1. A residence; a home. 2. One's legal residence. v. dom·i·ciled, dom·i·cil·ing, dom·i·ciles v.tr. 1. CDC IXIS Capital Markets North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . CDCFC will issue guaranteed investment contracts Guaranteed investment contract (GIC) A pure investment product in which a life company agrees, for a single premium, to pay at a maturity date the principal amount of a predetermined annual crediting (interest) rate over the life of the investment. (GICs) and lend the proceeds to CDC Financial Products, which is rated `AAA/F1+' by Fitch. GICs are financial instruments, commonly purchased by municipal entities as investments for construction funds, reserve funds, and any other funds related to municipal bond issuance, that guarantee a stated return to the buyer over a specified term. Most GICs have a fixed maturity date (or dates) when the principal portion of the investment must be repaid and provide for early withdrawals of all or a portion of the principal upon notice from the buyer. One notable exception is the prohibition on early principal withdrawal for purposes of reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. . As such, the primary challenge to CDCFC is to reduce or eliminate the reinvestment risk Reinvestment Risk The risk that future proceeds will have to be reinvested at a lower potential interest rate. Notes: This term is usually heard in the context of bonds. that may result from unexpected changes in the municipalities' cash flow needs. Typical contingencies include delays in construction, changes in tax receipts, and shortfalls in a revenue account. In each of these events, monies may be withdrawn or deposited without penalty. The ratings are based on the ability of CDCFC to satisfactorily manage its assets and liabilities, legal and structural restrictions described in the documents, as well as strong operating guidelines and risk controls. In addition, the rating reflects the guarantee of all CDCFC obligations by CDC IXIS, the market obligations of which are, in turn, guaranteed by its parent, Caisse des Depots et Consignations (CDC), a French public-sector financial institution. In view of its status as a public establishment, CDC benefits from the implicit guarantee of the State of France for its commitments to counterparties. As a consequence, the rating assigned to CDC is the same rating as the State of France (`AAA'). Fitch rates CDC and the guaranteed obligations of CDC IXIS `F1+' short-term and `AAA' long-term. |
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