Johannesburg, 20 March 2014: Global Credit Rating Co. (Pty) Ltd (‘GCR’) has accorded and affirmed the final, public ratings of the following Secured Bonds that it rates following the amendments to its Global Structurally Enhanced Corporate Bonds Rating Criteria made on 22nd October 2013:
• Emira Property Fund – EPF001 – 31st October 2013 – Affirmed AA(ZA).
• Vukile Property Fund Ltd – VKE01, VKE02 and VKE03 – 11th December 2013 Affirmed AA+(ZA).
• Investec Property Fund Ltd – IPF01, IPF02, IPF03 and IPF06 – 20th January 2014 Affirmed AA-(ZA).
• Hospitality Property Fund Ltd – HPF01 – 14th February 2014 Affirmed A(ZA).
• Hospitality Property Fund Ltd – HPF04 and HPF05 – 14th February 2014 Accorded A(ZA).
• Adcorp Holdings Ltd – ADCB01 and ADCB02 – 25th February 2014 Affirmed A(ZA).
• Adcorp Holdings Ltd – ADCP05 and ADCP06 – 25th February 2014 Accorded A1(ZA).
• Real People Investment Holdings – Partially Guaranteed Notes RPG02 – 28th February 2014 Downgraded to A-(ZA) from A(ZA).
• Idwala Industrial Holdings Limited – IDW001, IDW002 and IDW003 – 20th March 2014 Affirmed BBB(ZA).
The ratings of all Secured Bonds have been affirmed with no rating movement, with the exception of Real People’s RPG02 notes. The rating of the RPG02 notes was downgraded to ‘A-(ZA)’ from ‘A(ZA)’ due to a recalibration of the international to national scale mapping table, which in turn had an impact on the notching applied under the Global Structurally Enhanced Corporate Bonds Rating Criteria. It should be noted that the downgrade was not in respect to credit concerns within the transaction.
GCR revised its Global Structurally Enhanced Corporate Bonds Rating Criteria in October 2013, and the amendments included: the notching applied from the issuer rating, as well as the level of information GCR expects to receive from the issuer particularly with regard to audit opinions. Under the revised methodology a rating cap may be applied to secured bonds where the underlying corporate rating is ‘BB+’ or lower. GCR may also deem a particular security package or underlying collateral inappropriate for such a transaction. The rating of Structurally Enhanced Corporate Bonds will no longer be accompanied by the (sf) modifier.
The ratings of Secured Bonds typically incorporate recoveries potentially arising from the sale of the Underlying Collateral and can therefore not be compared with, for example, a traditional corporate credit rating (the latter, which is also an expression of expected loss, but refers to probability of default and an average historical loss given default for generalised senior unsecured debt). If the rating of the Issuer changes, the rating of the Secured Bonds may also change, but not necessarily in the same quantum. The rating of the Secured Bonds may also change if the estimated stressed calculated recoveries in respect of the Underlying Collateral changes materially. For more information please refer to the transaction reports available at www.globalratings.net.
+27 11 784 1771
+27 11 784 1771
+27 11 784 1771
Head of Structured Finance
+27 11 784 1771
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
GCR analysed the Transactions by applying its Global Master Criteria for Rating Corporate Entities; its Global Master Criteria for Rating Banks and Other Financial Institutions and its Global Structurally Enhanced Corporate Bonds Rating Criteria.
The ratings above were solicited by, or on behalf of, the rated clients, and therefore, GCR has been compensated for the provision of the ratings.
RATING LIMITATIONS AND DISCLAIMERS
ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: http://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: http://GLOBALRATINGS.NET/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT http://GLOBALRATINGS.NET.
SALIENT POINTS 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 Issuers and the Arrangers 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 Issuers and the Arrangers with no contestation of the rating.
The rating/s above were solicited by the Issuer of the Transaction; GCR has been compensated for the provision of the ratings.