Fitch Assigns 'AAA' Rating to Aladdin Financial Products LLC.
Aladdin is a Credit Derivatives Product Company (CDPC), incorporated in Delaware, that sells credit protection through credit default swaps (CDS) on single-name corporate exposures. Aladdin will be managed by Aladdin Capital Management LLC (ACM) and administratively supported by Aladdin Credit Services, Inc. (ACS). Both Aladdin and ACS are subsidiaries of Aladdin Credit Products, Ltd. (ACP), a Bermuda-based holding company.
ACM is a credit-focused alternative investment manager with approximately $23 billion of assets under management in collateralized loan obligations (CLO), collateralized debt obligations (CDO), and credit funds, among others.
Aladdin will engage in activities permitted by its operating guidelines. The operating guidelines specify, among other things, portfolio guidelines, eligible transactions, eligible counterparties, eligible investments and required capital. A proprietary capital model is used to determine Aladdin's required capital. Failure of capital tests and certain breaches of the operating guidelines can lead to restrictions in Aladdin's ability to sell additional credit protection.
The ratings assigned are based on the financial strength of the structure, standards imposed by the operating guidelines, the experience of the management team, the risk management and operational infrastructure, and the legal terms and structural restrictions of the transaction.
As announced in Fitch's press release titled, 'Fitch Clarifies Position on New Issue CDO Ratings,' dated Nov. 6, 2007 and available on the Fitch Ratings web site at www.fitchratings.com, Fitch is currently in the process of reviewing its rating methodology and model assumptions for all new issue CDO ratings and CDPCs that use similar methodologies. It should therefore be noted that Fitch is reassessing its analytic views and this could affect existing ratings, including the rating noted in this press release. Aladdin's technical document specifies that its capital model will use a stressed default rate table until Fitch completes its criteria review. After this review is complete, Aladdin will adopt the new methodology in order to maintain its 'AAA' rating.
Fitch will continue to monitor Aladdin on a regular basis.
The effective date of the new rating is Nov. 14, 2007.
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|Date:||Nov 16, 2007|
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