CORPORATE RECEIVABLES CORP. 'F-1+' COMMERICAL PAPERS AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --
CORPORATE RECEIVABLES CORP. 'F-1+' COMMERICAL PAPERS
AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --
NEW YORK, Feb. 27 /PRNewswire/ -- Corporate Receivables Corp.'s (CRC) $2 billion asset-backed commercial paper program is affirmed at 'F-1+' by Fitch. The issuer was formerly known was Cooperative Receivables Corp.
The program has been restructured to minimize reliance on Citibank for either credit or backup liquidity support. The rating is based on the quality of the receivables purchased by CRC, the required reserves dedicated to each receivable pool, $150 million of credit enhancement, liquidity support provided by a diversified bank group and Citibank, the sound legal structure, and the servicing capabilities provided by Citicorp.
CRC is a limited purpose California corporation created to securitize financial assets originated by sellers rated at least investment grade. CRC issues CP to fund asset purchases and financings backed by receivables. The assets are high quality trade receivables which are short-term in nature and medium-term receivables such as secured consumer loans. The receivables CRC purchases are well diversified by obligor and industry. CRC currently consists of 16 individual pools.
There are two layers of credit enhancement available to protect CP holders from losses. The first layer of loss protection is a minimum 5 percent reserve required for each receivable pool. On average the current reserves are equal to 14.9 percent. Each reserve is structured to a high investment grade level. In addition to the reserves, there is a $150 million cash collateral deposit held in escrow under the Credit Enhancement Indemnity and Guaranty Agreement, providing a fungible layer of loss protection for the noteholders. The deposit is 13.7 percent of the current outstandings and 7.5 percent of the program's size. Fitch believes that the program's credit enhancement is extremely strong given the diversity of the receivables and the low levels of losses experienced in the receivable pools.
Backstop liquidity support equal to 100 percent of CRC's program will be available to assure timely payment of maturing notes. CRC will target 50 percent liquidity coverage provided by non-Citibank sources. In addition to the third party liquidity bank commitments, CRC also requires each receivable portfolio to obtain liquidity in the form of an asset purchase agreement covering specific asset pools, including a secondary market agreement from Citibank.
Citicorp's Corporate Asset Funding (CAF) group acts as operating agent. CAF evaluates and structures all asset purchases and continuously monitors asset performance in compliance with its credit and investment policy. CAF's capable staff provides in-depth credit expertise, solid structuring capabilities, and the experience to identify and minimize asset deterioration. CAF, a division of Citicorp North America, Inc., is Citicorp's global asset securitization organization, experienced in administering structured receivables transactions for more than 50 years.
/CONTACT: J. Douglas Murray, 212-908-0518, or Mary E. Griffin, 212-908-0537, both of Fitch/ CO: Corporate Receivables Corp. ST: California IN: FIN SU: RTG SM -- NY079 -- 3413 02/27/92 16:13 EST