S&P Cnfrms No Rtg Impct on Australian 'A-1+' Rtd ABCP.Business Editors MELBOURNE--(BUSINESS WIRE)--May 30, 2003 Standard & Poor's--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. today confirmed that there will be no rating actions on 'A-1+' rated ABCP ABCP Asset-Backed Commercial Paper ABCP Associação Brasileira de Cimento Portland (Brazil) ABCP Associação Brasileira de Ciência Política ABCP American Board of Cardiovascular Perfusion ABCP Associate Business Continuity Planner programs as a result of holding investments with exposure to Royal & Sun Alliance Lenders Mortgage Insurance Lenders mortgage insurance (LMI), also known as private mortgage insurance (PMI), is insurance payable to a lender that may be required when taking out a mortgage loan. Ltd. (RSALMI). This follows the financial strength and counterparty credit ratings on RSALMI being lowered to A-' from 'A+' on May 22, 2003, and confirmation from RSALMI that the reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. arrangements it entered into to maintain an 'AA-' rating on subordinated tranches of RMBS RMBS Residential Mortgage-Backed Securities RMBS Rambus, Inc. (NASDAQ stock symbol) RMBS Russian Mortgage-Backed Securities with exposure to RSALMI would not be extended beyond the expiry date expiry date expire n → date f d'expiration; (on label) → à utiliser avant ... expiry date expire n → Ablauftermin m of June 3, 2003. Many Australian ABCP programs currently hold Australian RMBS that benefit from support provided by RSALMI policies. Standard & Poor's is currently reviewing all RMBS with RSALMI exposures to determine the impact of the RSALMI downgrade on them. No senior tranches of Australian RMBS are affected by the downgrade. For affected subordinated tranches, Standard & Poor's has recalculated the required level of credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing to support the current 'AA-' ratings on all of these tranches. In doing so, Standard & Poor's has given the 'A-' rated RSALMI policies 75% credit at the 'AA-' rating level. Where the level of additional support required is less than 25bps, Standard & Poor's will affirm the 'AA-' rating without further enhancement on the basis that excess spread flowing through the transaction will be sufficient to cover this amount. Where the level of additional support required exceeds 25bps, Standard & Poor's is in discussion with those issuers to determine whether they will provide additional credit enhancement to support the 'AA-' ratings on these securities. As soon as the result from these discussions is known, Standard & Poor's will issue a press release confirming the ratings outcomes on all affected RMBS transactions. Standard & Poor's expects to be in a position to do this on Monday June 2, 2003. Standard & Poor's is able to confirm today that no 'A-1+' rated ABCP programs are affected, as Standard & Poor's has completed its review of all subordinated RMBS held by these ABCP programs. Further, these particular RMBS tranches will have their 'AA-' ratings affirmed when the reviews have been completed. Copyright (c) 2003, Standard & Poor's Ratings Services |
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