Johannesburg, 8 November 2013 — Global Credit Rating Co. (“GCR”) has accorded final, public long term credit ratings and outlooks to the following Series 2 Notes to be issued by South African Securitisation Programme (RF) Limited (“SASP”) Series 2 on 8 November 2013.
ZAR 280m, Class A1, stock code LRFA1, interest at 3M Jibar + 1.65%, due 20 November 2016:.……………… ‘AA(ZA)(sf)’, Outlook Stable.
ZAR 52.5m, Class B1, stock code LRFB1, interest at 3M Jibar + 2.15%, due 20 November 2016:.……………… ‘A(ZA)(sf)’, Outlook Stable.
ZAR 17.5m, Class C1, stock code LRFC1, interest at 3M Jibar + 2.75%, due 20 November 2016:.……………… ‘BBB(ZA)(sf)’, Outlook Stable.
SASP is a public securitisation of rental and lease financed assets originated by Sasfin Bank Limited (“Sasfin”) through Sunlyn Rentals Proprietary Limited and other entities approved by Sasfin which include disclosed suppliers and super non-disclosed suppliers (“SNDs”). The programme allows the Issuer to issue individual tranches of notes in separate series; the liabilities and assets of each series will be completely segregated and the secured creditors of one series will not have recourse to the assets of any other series. The Class A1 Notes, Class B1 Notes and Class C1 Notes (collectively the “Series 2 Notes”) will be issued on 8 November 2013 under SASP Series 2 (the “Transaction”). SASP has issued notes under another series, SASP Series 1, whose assets (the “Series 1 Assets”) and liabilities are completely segregated from the assets of SASP Series 2 (the “Series 2 Assets”). The notes issued under SASP Series 1 are not rated by GCR.
The rating of the Notes is derived by applying GCR’s Global Consumer ABS Rating Criteria and Global Structured Finance Rating Criteria. GCR reviewed the performance of leases originated by Sasfin for the period from Q1 2004 to Q2 2013 and determined default and recovery base cases in line with GCR’s Global Consumer ABS Criteria. GCR then determined the appropriate stress levels for each rating band and tested the credit enhancement provided to each tranche of the Series 2 Notes for the respective rating levels. GCR relied on a cash flow model to determine if the cash flow from the securitised portfolio would be sufficient to service the Transaction at all the relevant rating levels. For more information, please read the South African Securitisation Programme (RF) Limited Series 2 New Issuance Report published on 8 November 2013. The New Issuance Report is available to subscribers of GCR’s Structured Finance subscription service.
The final, public credit ratings accorded to the ‘AA(ZA)(sf)’ rated securities relate to timely payment of interest and ultimate payment of principal, whilst the ratings on all other securities relate to ultimate payment of interest and ultimate payment of principal. The ratings exclude an assessment of the ability of the Issuer to pay either any (early repayment) penalties or any default interest rate penalties.
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APPLICABLE METHODOLOGIES AND RELATED RESEARCH
GCR analysed the Transaction by applying its Global Structured Finance Rating Criteria and its Global Consumer ABS Rating Criteria.
The ratings above were solicited by, or on behalf of, the rated client, and therefore, GCR has been compensated for the provision of the ratings.
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SALIENT FEATURES OF ACCORDED RATINGS
GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.
The Issuer and the Arranger participated in the rating process via face-to-face meetings, teleconferences and other written correspondence. Furthermore, the quality of info received was considered adequate and has been independently verified where possible.
The credit rating/s has been disclosed to the Issuer and the Arranger with no contestation of the rating.
The information received from the Arranger and other reliable third parties to accord the credit ratings included the portfolio performance data relating to the underlying equipment lease portfolio covering the period January 2004 – June 2013; an overview of the available lease portfolio that will be acquired by the Issuer at Transaction Closing as per 30 September 2013; an audit report relating to the securitised portfolio; the Issuer’s audited annual financial statements for the year ending 30 June 2013; signed transaction documents (with the exception of the Common Terms Agreement and Series Servicer Agreement which are to be signed by the Series Standby Servicer). GCR received the final draft of the transaction legal and tax opinions prepared by South African transaction legal counsel, Edward Nathan Sonnenbergs which were subsequently reviewed by Norton Rose Fulbright. The outstanding transaction documents and the signed opinions are expected to be received at a maximum of one week after Transaction Closing.