Fitch: Change in Swap Counterparty Would Not Affect Ratings of 2 CDOs.NEW YORK -- Fitch Ratings was notified of the intention to change the interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. counterparty of two structured finance collateralized debt obligation Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, (CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the ) transactions to Merrill Lynch Derivative Products AG (MLDP MLDP Marketing Leadership Development Program MLDP Maximum-Likelihood Decoding Problem ; rated 'AAA/F1+', Outlook Stable, by Fitch) from AIG AIG addressee indicator group (US DoD) AIG American International Group, Inc AiG Answers in Genesis (religious group in defense of Scripture) AIG Artificial Intelligence Group AIG Australian Industry Group Financial Products Corp (AIG, rated 'BBB/F1', Outlook Evolving). MLDP will replace AIG as interest rate swap counterparty on the following two transactions: --Putnam Structured Product CDO 2001-1 --TIAA Real Estate 2003-1 The novation of the interest rate swap counterparty will not impair the ratings of the notes because MLDP's rating meets Fitch's current minimum counterparty rating threshold of 'A/F1' as set forth in Fitch's current published criteria entitled 'Counterparty Risk in Structured Finance Transactions: Hedge Criteria' published Aug. 1, 2007, and available on the Fitch web site www.fitchratings.com. This commentary does not address whether or not the novation of the interest rate swap counterparty with respect to the two transactions is permitted by the terms of their respective documents. Nor does it address whether the swap counterparty change is in the best interests of, or prejudicial to, some or all of the holders of each of the two CDOs. Fitch emphasizes that while the criteria is satisfied today, it may not necessarily be satisfied in the future if Fitch's criteria change. In the event that a counterparty no longer satisfies the eligibility criteria specified in Fitch's then current criteria, the agency would expect the issuer to inform Fitch of its intended course of action as a result of its non-compliance, regardless of the provisions in the transaction documentation. Fitch further emphasizes that the criteria referenced above is currently under review. Fitch published 'Exposure Draft: Counterparty Risk in Structured Finance Transactions' on March 30, 2009. The comment period for market participants' feedback has been extended to May 29, 2009. Fitch does not notify individual transaction parties of changes in its criteria. Changes to criteria are published on Fitch's web site at www.fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP HTTP in full HyperText Transfer Protocol Standard application-level protocol used for exchanging files on the World Wide Web. HTTP runs on top of the TCP/IP protocol. ://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion