Fitch Rates The Children's Trust, Tobacco Settlement A-B Bonds, 2005.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. assigns the following ratings to The Children's Trust, tobacco settlement asset-backed bonds, series 2005: Ratings for New Issuance: -- $74,523,430.50 series 2005A 'BBB-'; -- $33,686,015.70 series 2005B 'BB'. Ratings confirmed for existing The Children's Trust, tobacco settlement asset-backed bonds, series 2002: -- $1,132,195,000 series 2002 'BBB'. The ratings for the series 2005 and series 2002 bonds are based on the quality of the pledged receivables and overall credit quality of the industry, which Fitch rates 'BBB-'. The pledged receivables are Puerto Rico's share of the strategic payments, initial and annual payments under MSA (Metropolitan Service Area) An urban area with at least 50,000 people plus surrounding counties. There are 306 MSAs and 428 RSAs (rural service areas) in the U.S. MSAs and RSAs are used to allocate cellular licenses. agreement. Fitch believes that due to the executory That which is yet to be fully executed or performed; that which remains to be carried into operation or effect; incomplete; depending upon a future performance or event. The opposite of executed. executory adj. something not yet performed or done. nature of MSA agreement the cash flows generated under this agreement can be rated a notch above the industry rating. Therefore, the highest possible rating at this point for tobacco settlement bonds is 'BBB'. Additionally, Fitch applies stress to forecast payments under the MSA consistent with the ratings assigned. In its stresses, Fitch only considers payments generated by the original participating manufacturers. Currently, the series 2002 can sustain stress scenarios in excess of those required by the 'BBB' rating. However, given the limiting factor A factor or condition that, either temporarily or permanently, impedes mission accomplishment. Illustrative examples are transportation network deficiencies, lack of in-place facilities, malpositioned forces or materiel, extreme climatic conditions, distance, transit or overflight rights, of the overall industry rating, Fitch confirms the 'BBB' rating on the series 2002 bonds. The series 2005 bonds are issued as additional bonds under an amended and restated indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. between The Children's Trust and Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/[1]) (ISIN: DE0005140008, NYSE: DB) (English: German Bank Trust. The series 2005 are subordinate to series 2002 bonds and will not receive any payments of interest or principal while series 2002 still outstanding. There is no liquidity reserve for series 2005 bonds. The accretion rates are 6.5% and 7.25% for series 2005A and series 2005B respectively. Under Fitch's 'BBB-' stress scenario, the series 2005A bonds can still make full payments of interest and principal. Although the legal final maturity date for series 2005A is 2050, under Fitch's 'BBB-' the bond pays out prior to its legal final date. Similarly, series 2005B bonds can make full payments of interest and principal under Fitch's 'BB' stress scenario. Although the legal final date for series 2005B is 2055, under Fitch's 'BB' stress scenario the bond pays out prior to its legal final. Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and 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 this site, at all times. This document will remain on the public site for seven days. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion