S&P Asgns Prelim Rtgs in Newcastle Bldg Soc CMBS Deal.Business Editors LONDON--(BUSINESS WIRE)--Standard & Poor's Nov. 15, 2002--Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. said today it assigned its preliminary credit ratings to the mortgage-backed floating-rate notes Floating-rate note (FRN) Note whose interest payment varies with short-term interest rates. floating-rate note An unsecured debt issue with an interest rate that is reset at specified intervals (usually every six months) according to a to be issued under Newcastle Building Society's U.K. CMBS CMBS See: Commercial Mortgage Backed Securities transaction (see list below). The notes, which will be issued by special-purpose entity Special-Purpose Entity A financing technique in which a company decreases its risk by creating separate partnerships, rather than subsidiaries, for certain holdings and solicits outside investors to take on the risk. Bamburgh Finance No. 1 PLC, will be backed by a pool of first-ranking mortgage loans secured over a portfolio of freehold Freehold, borough, United States Freehold, borough (1990 pop. 10,742), seat of Monmouth co., E central N.J.; settled c.1650, called Monmouth Courthouse (1715–1801), inc. as a town 1869, as a borough 1919. and leasehold commercial properties located in England, Scotland, and Wales Wales, Welsh Cymru, western peninsula and political division (principality) of Great Britain (1991 pop. 2,798,200), 8,016 sq mi (20,761 sq km), west of England; politically united with England since 1536. The capital is Cardiff. . All of the loans were originated by Newcastle Building Society The Newcastle Building Society is a UK building society, which has its head office in Newcastle upon Tyne, England. It was formed in 1980 as a result of a merger between the Grainger and Newcastle Permanent Building Societies. . "This is Newcastle Building Society's first securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. of commercial mortgages," said James Cuby, an associate at Standard & Poor's Structured Finance Ratings group in London. "The transaction allows Newcastle to use the principal proceeds of the mortgages to make further acquisitions during the acquisition period, which is expected to last about three years." Mr. Cuby added that such acquisitions are permitted under specific guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. and will serve to maintain the initial balance and quality of the portfolio during the acquisition period prior to amortization. The preliminary ratings reflect the credit quality of the commercial mortgage loans backing the notes, the structure of the transaction, the quality of the underlying assets, the associated cash flows that service the loans, and the ability of the servicer, Newcastle Building Society, to perform its role in this transaction. The rating on each class of notes also reflects its seniority over each successive class of notes below it. In addition, the ratings are supported by the following: -- A liquidity facility, initially equal to 6.8% of the initial issuance; -- A first-loss piece equal to 4% of the notes (fully funded at closing); and -- Hedging instruments protecting underlying noteholders from adverse movements in interest rates. The full presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. The presale can also be found on Standard & Poor's new Web site at www.standardandpoors.com. Click "Fixed Income", then under "Browse by Sector" select "Structured Finance" and find the article under "Presale Credit Reports". PRELIMINARY RATINGS ASSIGNED Bamburgh Finance No. 1 PLC GBP212.87 Million Mortgage-Backed Floating-Rate Notes Class Rating Amount (Mil. GBP) A AAA 168.17 B AA 13.84 C A 14.37 D BBB 9.68 E N.R. 6.81 N.R.--Not rated. ANALYST E-MAIL ADDRESSES james_cuby@standardandpoors.com david_beale@standardandpoors.com StructuredFinanceEurope@standardandpoors.com Copyright 2002, Standard & Poor's Ratings Services |
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