Fitch Downgrades KKR Atlantic's Secured Liquidity Notes to 'D' & Withdraws the Rating.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 -- 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. has downgraded the short-term rating of the secured liquidity notes (SLNs) issued by KKR KKR Korringa-Kohn-Rostoker (method) KKR Kohlberg, Kravis & Roberts & Co. KKR Kalkara (postal locality, Malta) KKR Kramers-Kronig Relations KKR Komarappa Gounder Ramalingam (hospital in India) Atlantic Funding Trust (KKR Atlantic) to 'D'. The downgrade reflects KKR Atlantic's nonpayment of the SLNs in accordance with the original terms of the SLNs. Beginning Aug. 20, 2007, parties to the program executed a series of standstill agreements. The standstill agreements waived the overcollateralization (OC) test, suspended the requirement for collateral liquidation, pushed back the expected maturity dates and the final maturity dates on all SLNs, and waived the obligations of KKR Financial and the affiliated depositor corporation under the repurchase agreements. Fitch views the existing standstill agreements and the proposed restructuring of the existing SLNs as a distressed debt distressed debt Debt with low junk status and a market price substantially below par value, often pennies on the dollar. Investors sometimes buy distressed debt on the possibility that management can renegotiate loan agreements and keep the issuer out of exchange under its criteria. The rating withdrawal reflects the effective replacement of the existing notes with amended notes with differing terms. On Aug. 15, 2007 Fitch downgraded the SLN SLN Sentinel Lymph Node SLN SUNY (State University of New York) Learning Network SLN Science Learning Network SLN Special Local Need SLN Sri Lanka Navy SLN Superior Laryngeal Nerve Sln Slovene (linguistics) short-term ratings of KKR Atlantic to 'B' from 'F1+' and placed the ratings on Rating Watch Evolving. On Aug. 27, 2007, Fitch revised the Rating Watch to Negative. Oct. 5, 2007 would have been the date KKR Atlantic's first SLN reached its final maturity date based on its original terms. The 'D' rating reflects the nonpayment of the SLNs based on the original terms. KKR has indicated that a program default, as defined in the documents, has been avoided through the standstill agreements and the potential restructuring. However, under its criteria, Fitch views the standstill and potential restructuring as a distressed debt exchange. Fitch's short-term ratings reflect the likelihood of full and timely repayment of an obligation in accordance with the original terms and does not incorporate the level of recovery prospects. KKR Atlantic is a special purpose, bankruptcy-remote Delaware limited liability company established to issue SLNs and use the proceeds to enter into repurchase agreements with KKR Financial Corporation or the affiliated depositor corporation. The repurchase agreements are collateralized by 'AAA' rated residential mortgage-backed securities (RMBS RMBS Residential Mortgage-Backed Securities RMBS Rambus, Inc. (NASDAQ stock symbol) RMBS Russian Mortgage-Backed Securities ). As of Oct. 1, 2007, KKR Atlantic had approximately $2.453 billion of outstanding principal balance of SLNs. The asset balance reported (used for the purpose of the OC test) was approximately $2.452 billion. 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. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion