Fitch Releases Report on CSN Export Receivables Trust 2005-1.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. has released an international new issue report on the 'BBB-' rating to Companhia Siderurgica Nacional (CSN CSN Crosby, Stills, and Nash (band) CSN Centrala studiestödsnämnden (Swedish: state education grant and loan program) CSN Confédération des Syndicats Nationaux (French) ) Export Receivables Master Trust 2005-1 issuance. The rating applies to the issuance of US$250 million fixed-rate certificates. The series 2005-1 certificates, all representing senior undivided interest undivided interest n. title to real property held by two or more persons without specifying the interests of each party by percentage or description of a portion of the real estate. in the trust assets will pay down the remaining balance on the US$125 million series 2003-2 and add to the existing program made up of: -- US$161.95 million series 2004-1; -- US$142 million series 2003-1. In addition, Fitch affirms the ratings for the series 2003 and 2004 certificates at 'BBB-'. The certificates are backed by the receivables generated by the future sale of certain steel products, specifically slabs, hot and cold rolled products, tinplate, and galvanized gal·va·nize tr.v. gal·va·nized, gal·va·niz·ing, gal·va·niz·es 1. To stimulate or shock with an electric current. 2. products, produced by CSN and sold to CSN Export, a Luxembourg entity. CSN will sell steel products to CSN Export in exchange for the proceeds, and CSN Export will then sell the products to buyers outside Brazil. These exports are diversified and have proven to be a strategic business line for the company. Total annual export volumes have historically ranged between 20%-40% of total sales. In 2004, exports represented 28% of total sales. Fitch's assigned 'BBB-' rating is higher than CSN's foreign currency rating of 'BB-', as the transaction mitigates certain sovereign and corporate risks associated with CSN. All buyers of products being sold through CSN Export will receive irrevocable notices to make payments into the collection account. Additionally, CSN covenants that a minimum of 60% (by dollar value) of all buyers will have signed a notice and consent (N&C) agreement to make these payments directly or that it will generate receivables worth at least 2.0 times (x) maximum scheduled debt service from buyers who have signed N&C agreements. The N&C agreements obligate obligate /ob·li·gate/ (ob´li-gat) pertaining to or characterized by the ability to survive only in a particular environment or to assume only a particular role, as an obligate anaerobe. customers to deposit collections into an offshore collection account controlled by the 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. trustee. At closing, approximately 75% of all customers (including affiliates) and 20% of end-users have signed N&C agreements. Also, there will be a required debt service coverage ratio The debt service coverage ratio (DSCR), or debt service ratio, is the ratio of net operating income to debt payments on a piece of investment real estate. It is a popular benchmark used in the measurement of an income-producing property’s ability to produce (DSCR DSCR See: Debt-service coverage ratio ) of 2.25x and 3.0x at the three- and six-month reporting dates, respectively. The total debt size of these future flow issuances will represent a relatively small share of the company's overall debt outstanding. Fitch estimates coverages using maximum debt service payments will range between 4x and 20x throughout the life of the deal. Fitch used a variety of stress case scenarios and believes that CSN's current and future steel export business is adequate to support the future flow certificates. For more detailed information on this transaction, see the international new issue report titled 'CSN Export Trust Series 2005-1' available on the Fitch Ratings web site at www.fitchratings.com. Additionally, a corporate credit update on CSN dated May 19, 2005 can also be found at www.fitchratings.com, along with a full sovereign report on Brazil. 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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