Fitch Downgrades 2 Classes & Maintains Watch Negative on BLX Transactions.CHICAGO -- 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. takes the following rating actions on four Business Loan Express (BLX BLX Business Line Expert BLX Basic Launch Complex BLX British Legion of Xbox (gaming clan) ) transactions: Business Loan Express SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government Loan-Backed Adjustable Rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. Notes, Series 2001-2 --Class A downgraded to 'A' from 'AA', remains on Rating Watch Negative; --Class M downgraded to 'BB' from 'BBB', remains on Rating Watch Negative. Business Loan Express SBA Loan-Backed Adjustable Rate Notes, Series 1998-1 --Class A rated 'AAA', remains on Rating Watch Negative. Business Loan Express SBA Loan-Backed Adjustable Rate Notes, Series 2002-1 --Class A rated 'AAA', remains on Rating Watch Negative; --Class M rated 'A', remains on Rating Watch Negative. Business Loan Express Business Loan-Backed Adjustable Rate Notes, series 2002-A --Class A rated 'AAA', remains on Rating Watch Negative; --Class B rated 'A', remains on Rating Watch Negative. The downgrades reflect continued deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. within the collateral pool for the series 2001-2. Since Fitch's last review in October 2008, the transaction has continued to experience losses and increasing delinquencies, with 60+ day delinquencies currently representing 27.26% of the pool. Particularly, the 2001-2 transaction has experienced $1.3 million in additional net losses since October 2008. To date, cumulative net losses are currently at 8.06%. Additionally, Fitch has continued to see consistent delinquency bucket roll-forward rates and expects this trend to continue, which ultimately may lead to further portfolio asset deterioration. Fitch's analysis, detailed below, anticipates further declining credit support available to the outstanding classes. The transactions were initially placed on Rating Watch Negative on Oct. 6, 2008, due to the Chapter 11 bankruptcy filing by the servicer, Ciena Capital, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . The bankruptcy filing and upticks in performance continue to be a concern for Fitch. Since October 2008, Fitch has continued to see an increase in delinquency performance across the transactions. As delinquencies continue to roll forward, further deterioration could occur within the pools, which may lead to decline in available 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 . As a result, Fitch is maintaining the Rating Watch Negative on all rated classes across the four transactions. In its analysis, Fitch reviewed the transactions on an individual loan basis. All loans over 60 days delinquent were deemed defaulted loans. Loss and recovery expectations were applied on the loans based on collateral characteristics (i.e. real estate, machinery and equipment, and accounts receivables accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying ) and historical recovery performance. Furthermore, additional haircuts were applied on various late stage delinquency buckets due to the historical roll rates seen within these late stage delinquency buckets. After determining expected losses on each loan, these expectations were applied to outstanding balances. Fitch was then able to assess the impact on enhancement levels. 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.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. |
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