Fitch Rates Jefferies' Station Place Securitization Trust, Series 2017-6 Notes 'BBB-'.
Chicago: Fitch Ratings has assigned a long-term rating of 'BBB-' to $60 million of senior secured notes (the notes) issued by Station Place Securitization Trust, Series 2017-6 (the trust) maturing in November 2018.
Jefferies Funding LLC (JFLLC), a wholly-owned subsidiary of Jefferies Group LLC (Jefferies; BBB-/F3/Stable), will periodically sell assets to, and simultaneously agree to repurchase the same assets from, the trust pursuant to a master repurchase agreement. Jefferies has provided a full and unconditional guarantee of JFLLC's payment obligations to the trust under the repurchase agreement. The trust has issued the notes, which are secured by the repurchase agreement assets as well as its rights under the repurchase agreement. The trust's payment obligations on the notes are not directly guaranteed by Jefferies.
KEY RATING DRIVERS
The rating on the notes is based entirely on the ratings of Jefferies. Fitch has given no consideration to any collateral provided as it has not evaluated, nor does it expect to review, the collateral policy or collateral assets backing the notes. Because Jefferies has fully and unconditionally guaranteed the due and punctual payment of all obligations of JFLLC to the trust under the repurchase agreement, it is Fitch's view that the notes rank equal with senior, unsecured obligations of Jefferies.
Fitch acknowledges that the issuance is backed by collateral, but given that the collateral for the issuance can be substituted at any time according to the terms of the issuance, Fitch does not believe that the rating benefits from any uplift from the underlying collateral and equalizes the rating with Jefferies' senior unsecured debt rating due to the guarantee.
The rating assigned to the notes is equalized with Jefferies' 'BBB-' long-term debt rating. Jefferies' ratings are in turn equalized with the ratings of its parent company, Leucadia National Corporation (Leucadia; BBB-/Stable). As a result, the rating assigned to the notes is sensitive to changes in the ratings of Jefferies and Leucadia. For information on Jefferies' and Leucadia's rating sensitivities, please refer to Fitch's press releases, 'Fitch Affirms Jefferies at 'BBB-/F3'; Outlook Stable' and 'Fitch Affirms Leucadia at 'BBB-'; Outlook Stable' at www.fitchratings.com.
Jefferies, a Delaware-incorporated holding company, is a full-service investment banking and institutional securities firm primarily serving middle-market clients and investors. Its primary broker/dealer operating subsidiary, Jefferies LLC, holds the vast majority of the firm's consolidated assets and is regulated by the SEC. At May 31, 2017, Jefferies had U.S. GAAP total assets of $40.1 billion and shareholders' equity of $5.6 billion (including non-controlling interests and $1.9 billion of goodwill and intangibles). Fitch considers Jefferies to be a core subsidiary of Leucadia National Corp. (Leucadia; BBB-/Stable) based on Jefferies' significance relative to Leucadia's equity and the role it is expected to continue playing in the combined company's future strategic direction.
Fitch has assigned the following rating:
Station Place Securitization Trust, Series 2017-6
--$60 million senior secured notes maturing November 2018 'BBB-'.
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|Publication:||Daily the Pak Banker (Lahore, Pakistan)|
|Date:||Dec 20, 2017|
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