Fitch Downgrades One Class of Pinnacle CBO, Ltd.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 downgrades one class of notes issued by Pinnacle pinnacle (pĭn`ĭkəl), minor architectural motif of vertical tapering shape, usually crowning a pier, buttress, or gable. Although sometimes it appears in Renaissance design, as in the Certosa di Pavia, it is almost exclusively a medieval CBO CBO See: Collateralized Bond Obligation. Ltd. (Pinnacle). The following rating action is effective immediately: --$6,503,190 senior secured notes downgraded to 'B/DR1' from 'BBB'; --$80,108,014 second priority senior notes remain at 'C/DR6'. Pinnacle is 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 (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 ) managed by Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. Investment Management which closed Nov. 20, 1997. Five performing assets, primarily emerging market securities, remain in the current portfolio. Included in this review, Fitch discussed the current state of the deal with the asset manager and their expectations going forward. The downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. is the result of undercollateralization and limited interest revenues, combined with the diversion of principal proceeds to the interest due on the second priority senior notes. Since May 2005, a total of $9.58 million in principal have been used to pay interest on the second priority senior notes. As of the most recent Nov. 27, 2006 payment date, failing senior interest coverage tests have diverted principal proceeds to pay the senior secured note principal, but once these tests were cured, principal cashflows have been used to pay interest on the second priority senior notes. Fitch expects the second priority senior note interest payments to continue to be partly funded by principal proceeds from the $9.43 million par amount of performing assets remaining. As of the Nov. 16, 2006 trustee report, the senior secured par value test was passing, increasing to 152.4% from 114% from the last review in December 2004. The senior secured interest coverage (IC) test, however, failed to pass, increasing to 113.6% from 106.4%, relative to a trigger of 142%. As a result, approximately $1.69 million of principal proceeds were used to redeem the senior secured note balance and cure the senior secured IC test on Nov. 27, 2006, and $1.36 million of principal proceeds used to pay interest to the second priority senior notes. As of the last payment date, the second priority notes have deferred a total of $24.11 million in interest. Fitch anticipates this trend to carry on for future payments, with continual leakage LEAKAGE. The waste which has taken place in liquids, by their escaping out of the casks or vessels in which they were kept. By the act of March 2, 1799, s. 59, 1 Story's L. U. S, 625, it is provided that there be an allowance of two per cent for leakage, on the quantity which shall appear of scheduled principal proceeds to pay second priority note interest, compromising the long term credit worthiness of the senior secured notes. The rating of the senior notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the second priority notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. 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 Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which is available on the 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. web site at www.fitchratings.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, Ltd. and their subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any successor or successors thereto. |
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