Fitch Affirms ZARS 2004-1.CHICAGO -- Fitch affirms one note issued by Zero Accrual Receipts, series 2004-1 ('ZARS'). The affirmation is the result of Fitch's review process. The following rating action is effective immediately: --$500,000,000 series 2004-1 affirmed at 'AAA'. ZARS is an investment structured by Lazard Freres & Co. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , whereby investors gain exposure to a yield-enhanced, zero-coupon bond Zero-Coupon Bond A debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value. Also known as an accrual bond. issued by Resolution Funding Corporation Resolution Funding Corporation (RefCorp) A government agency established by Congress in 1989 to issue bailout bonds and raise funds for the activities of the Resolution Trust Corporation, as well as to administer struggling institutions inherited from the disbanded Federal Savings ('RefCorp Zero'). The investors achieve a higher yield than the YTM YTM See yield to maturity (YTM). of an underlying zero-coupon bond by repacking the zero with a short position on a call option. Investors will receive the ZARS securities which will come due on the maturity of the underlying RefCorp Zero in 2020 or upon the exercise of the call option by the call option holder. The repackaging of the bond is done through a Depository Agreement whereby U.S. Bank, N.A. ('U.S. Bank') deposited the RefCorp Zero into a trust account for the benefit of the investors in exchange for the investors providing cash in the amount of the value of the RefCorp Zero less the proceeds generated from the short call option written on the RefCorp Zero through the Depository Agreement. This affirmation is based upon U.S. Bank's outstanding 'F1+' short term rating. Fitch believes that the current rating still reflects the risk to the noteholders. Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Derivative Fitch web site at www.derivativefitch.com. For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Oct. 4, 2006 and also available on Fitch's web site at www.derivativefitch.com. Fitch's 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 site, www.derivativefitch.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. Fitch means Fitch, Inc., Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. , Ltd. and their subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any successor or successors thereto. |
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