Fitch Upgrades American Capital Strategies IDR to 'BBB'; Outlook Stable.CHICAGO -- Fitch upgraded the following American Capital Strategies, Ltd. (ACAS ACAS Cardiology A clinical trial–Asymptomatic Carotid Atherosclerosis Study which evaluated the 5-yr risk of fatal and non-fatal stroke-primary outcome in Pts with asymptomatic but severe carotid atherosclerosis. See Carotid stenosis. ) debt ratings: --Long-term Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) to 'BBB from 'BBB-'; --Senior Unsecured Debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. Rating to 'BBB' from 'BBB-'. The Rating Outlook is Stable. The ratings upgrade reflects the strength of ACAS' overall financial performance, strong capitalization, and slightly improved funding flexibility due to the company's progress over the past two years toward meeting its goal of having unsecured debt comprise 50% of total debt. The company's overall financial performance reflects significant asset growth and net portfolio appreciation and gains. ACAS has issued, through private placements, $368 million of unsecured term debt since September 2004 and has increased the size of its unsecured revolving bank facility from $255 million to $900 million. Including unsecured revolving bank debt, unsecured debt currently represents 34% of overall funded debt Funded Debt Long-term debt that matures after more than one year. Notes: This is usually issued as a bond or a long-term note. See also: Bond, Debt, Maturity, Note Funded debt Debt maturing after more than one year. . Secured financing (particularly collateralized loan obligations Collateralized loan obligation (CLO) A security backed by a pool of commercial or personal loans , structured so that there are several classes of bondholders with varying maturities, called tranches. Similar in structure to Collateralized Mortgage Obligations. ) continues to represent an important funding source, especially for the long-term component of ACAS' funding strategy. Furthermore, the company has raised nearly $2.4 billion of equity capital over the past three years to support portfolio growth. Other key rating factors include the company's market position as one of the premier private equity and mezzanine investment firms in the U.S., strong liquidity, and the quality and capability of its support infrastructure, which includes the Financial Analysis and Compliance Team (FACT) and the Operations team. A primary rating concern remains the overall size and pace of growth over the past three years as well as the planned expansion of the asset management business. Other primary rating concerns include the significant reliance on capital markets to fund growth and the increased level of competition within the sector. ACAS is a publicly traded buyout and mezzanine fund that provides investment capital in the form of senior and subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and equity to middle market companies. At Sept. 30, 2006, ACAS reported total assets of nearly $7.9 billion, which included total investments at fair value of $7.5 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. |
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