S&P Lwrs Rtgs on Segesta's CDO Nts; Off CreditWatch.Business Editors LONDON--(BUSINESS WIRE)--Standard & Poor's Oct. 23, 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 lowered its credit ratings on the class A, B, and C 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 issued by Segesta 2 Finance S.A., a 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. , following an increase in the expected default rate of the reference pool at the 'BBB-', 'B', and 'CCC-' levels. At the same time, the ratings were removed from CreditWatch. Segesta 2 Finance is a CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the transaction, which closed in December 2000 with a EUR EUR In currencies, this is the abbreviation for the Euro. 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. 365 million static reference pool comprising senior unsecured bonds, credit derivatives Credit Derivative Privately held negotiable bilateral contracts that allow users to manage their exposure to credit risk. Credit derivatives are financial assets like forward contracts, swaps, and options for which the price is driven by the credit risk of economic agents (private , and ABS. The class A notes were placed on CreditWatch on Oct. 11, 2002, pending a review of the results of cash flow runs generated for Segesta 2 Finance. On Nov. 19, 2001 and March 4, 2002, the class B and C notes, respectively, were placed on CreditWatch with negative implications pending the outcome of a previously issued credit event notice. An additional credit event notice was issued for one of the underlying entities in July 2002. This brought the number of credit event notices issued to seven, representing 14.5% of the total reference portfolio at closing. This has contributed to the deterioration of the 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 available in the transaction. In addition to the credit event notices, there has been a gradual deterioration in the credit quality of the performing assets in the pool. The ratings on Segesta 2's notes will continue to reflect the credit quality of the reference credits and the level of credit enhancement provided by subordination and excess spread.
OUTSTANDING RATINGS LOWERED AND REMOVED FROM CREDITWATCH
Segesta 2 Finance S.A.
EUR136.96 Million Floating-Rate Notes
Class Rating
To From
A BB+ BBB-/Watch Neg
B CCC- B/Watch Neg
C CC CCC-/Watch Neg
ANALYST E-MAIL ADDRESSES roberto_paciotti@standardandpoors.com james_gayer@standardandpoors.com StructuredFinanceEurope@standardandpoors.com Copyright 2002, Standard & Poor's Ratings Services |
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