Fitch Downgrades 1 & Affirms 5 Classes Of Eaton Vance CDO III, Ltd.Business Editors NEW YORK--(BUSINESS WIRE)--Aug. 26, 2003 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. downgrades one class of notes and affirms five classes of notes issued by Eaton Vance Eaton Vance is an American financial services company headquartered in Boston, MA. It is traded on the New York Stock Exchange under the symbol EV.[1] At the end of the second quarter of the 2006 fiscal year, the company had assets under management of $118.8 billion. 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 III, Ltd. The transaction, a collateralized debt obligation Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, (CDO), is supported by a diversified portfolio of leveraged loans and high-yield bonds High-yield bond See: Junk bond high-yield bond See junk bond. . The rating action is based on deterioration of the credit fundamentals of the portfolio to the point where the risk is no longer consistent with the current ratings. The portfolio contains a number of securities whereby default is probable, although only a handful of assets are classified as defaulted. The Fitch weighted average rating factor (WARF WARF Wisconsin Alumni Research Foundation WARF Wide Aperture Research Facility WARF Wartime Active Replacement Factors WARF weighted-average risk factor WARF Wartime Attrition and Replacement Factors WARF Whylie Animal Rescue Foundation ) is currently 56.09 ('B/B-') relative to the initial WARF of 48 ('BB-/B+'). The following class of Eaton Vance CDO III, Ltd. has been downgraded: -- Class D floating-rate notes to 'BB-' from 'BB+'. The following classes of Eaton Vance III have been affirmed: -- Class A-1 floating-rate notes 'AAA'; -- Class A-2 fixed-rate notes 'AAA'; -- Class B floating-rate notes 'A-'; -- Class C-1 floating-rate notes 'BBB+'; -- Class C-2 floating-rate notes 'BBB+'. Eaton Vance CDO III, Ltd., managed by Eaton Vance Management, was established in August 2000 to issue $400 million in notes and preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . The turbulent market conditions of the last several years has resulted in some credit migration of the portfolio. Fitch has discussed the current status of the transaction with the collateral manager and believes that the manager has taken substantial action to preserve noteholder value in the face of difficult times. For example, the collateral manager has reduced the portfolio's high yield bond exposure over the last 18 months in favor of senior secured bank loans. This has provided more stability to the portfolio. In addition, the collateral manager has consistently redirected interest proceeds to purchase additional collateral to improve the principal coverage of the rated debt. Fitch will continue to monitor Eaton Vance CDO III, Ltd. to ensure its ratings are accurate. Additional deal information and historical data are available on the Fitch Ratings website at 'www.fitchratings.com'. |
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