Johannesburg, 17 October 2017 — Global Credit Ratings (“GCR”) has withdrawn the final, public long-term credit rating of ‘A(ZA)’ with a ‘Stable’ Outlook accorded to the COH002 Senior Secured Floating Rate Notes or (the “Senior Notes”) issued by Curro Holdings Limited (the “Issuer” or “Curro”) in April 2014, following the full redemption of the Senior Notes:
R125m, Senior Secured Floating Rate Notes, maturing 15 April 2019, stock code COH002………… A(ZA); Stable Outlook.
Curro has elected to exercise its right of early redemption on the Senior Notes as provided for in the Applicable Pricing Supplement dated on or about 15 April 2014 and the applicable R2bn Domestic Medium-Term Note Programme Memorandum dated 18 November 2013. Curro redeemed the Senior Notes at face value with any interest accrued thereon up until the early redemption date of 15 October 2017 (or the following Business Day). Therefore, post the redemption no COH002 Notes are outstanding. Consequently, GCR has therefore withdrawn its rating on the COH002 Notes.
The final, public ratings accorded to the COH002 Senior Notes related to ultimate payment of interest and principal (as opposed to timely, akin to a loss severity rating). The ratings excluded an assessment of the ability of the Issuer to pay any (early repayment) penalties. For more information on the Transaction, please read GCR’s Curro Holdings Limited R275m Senior Secured Notes Surveillance Report published on 20 December 2016.
Senior Structured Finance Analyst
+27 11 784 1771
Structured Finance Analyst
+27 11 784 1771
Sector Head: Structured Finance Ratings
Sector Head: Structured Finance Ratings
+27 11 784 1771.
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
- Global Master Criteria for Rating Corporate Entities (Feb’17);
- Global Structurally Enhanced Corporate Bonds Rating Criteria (Sep’16);
- Curro Holdings Limited’s Corporate Rating Report (May’17);
- Curro Holdings Limited R275m Senior Secured Notes New Issuance Report (Apr’14) and subsequent Tap Issuance Report (Dec’15);
- Curro Holdings Limited R275m Senior Secured Notes Surveillance Report (Dec’16).
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.
|Applicable Pricing Supplement||A transaction document that describes the particulars of notes issued.|
|Arranger||Usually an Investment bank that advises and constructs a transaction and acts as a conduit between the transaction parties: Client, Issuer, Credit Rating Agency, Investors, Legal Counsel and Servicers.|
|Bond||A long term debt instrument issued by either: a company, institution or the government to raise funds.|
|Credit||A contractual agreement in which a borrower receives something of value now, and agrees to repay the lender at some date in the future, generally with interest. The term also refers to the borrowing capacity of an individual or company|
|Credit Rating||An opinion regarding the creditworthiness of an entity, a security or financial instrument, or an issuer of securities or financial instruments, using an established and defined ranking system of rating categories.|
|Credit Risk||The probability or likelihood that a borrower or issuer will not meet its debt obligations. Credit Risk can further be separated between current credit risk (immediate) and potential credit risk (deferred).|
|Debt||An obligation to repay a sum of money.|
|Domestic Medium Term Note Programme||A debt issuance programme that allows an Issuer the continued and flexible issuance of several types of securities in accordance with the programme terms and conditions.|
|Early Redemption||The repurchase of a bond by the issuer before it matures.|
|Floating Rate Notes||Debt securities that have a periodic interest rate reset in relation to the reference rate, i.e. JIBAR.|
|Issuer||The party indebted or the person making repayments for its borrowings.|
|Liability||All financial claims, debts or potential losses incurred by an individual or an organisation.|
|Liquidity||The ability to repay short-term obligations or short-term availability of liquid assets to a market or entity.|
|Long-Term Rating||A long term rating reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.|
|Loss||A tangible or intangible, financial or non-financial loss of economic value.|
|Market||An assessment of the property value, with the value being compared to similar properties in the area.|
|Obligation||The title given to the legal relationship that exists between parties to an agreement when they acquire personal rights against each other for entitlement to perform.|
|Pricing||A process of determining the price of a debt security.|
|Principal||The total amount borrowed or lent, e.g. the face value of a bond, excluding interest.|
|Provision||An amount set aside for expected losses to be incurred by a creditor.|
|Rating Outlook||A Rating outlook indicates the potential direction of a rated entity’s rating over the medium term, typically one to two years. An outlook may be defined as: ‘Stable’ (nothing to suggest that the rating will change), ‘Positive’ (the rating symbol may be raised), ‘Negative’ (the rating symbol may be lowered) or ‘Evolving’ (the rating symbol may be raised or lowered).|
|Redemption||The repurchase of a bond at maturity by the issuer.|
|Repayment||Payment made to honour obligations in regards to a credit agreement in the following credited order: 3.) Satisfy the due or unpaid interest charges; 4.) Satisfy the due or unpaid fees or charges; and 5.) To reduce the amount of the principal debt.|
|Securities||Various instruments used in the capital market to raise funds.|
|Senior||A security that has a higher repayment priority than junior securities.|
|Short-Term Rating||A short term rating is an opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.|
|Stock Code||A unique code allocated to a publicly listed security.|
|Structured Finance||A method of raising funds in the capital markets. A Structured Finance transaction is established to accomplish certain funding objectives whist reducing risk.|
|Surveillance||Process of monitoring a transaction according to triggers, covenants and key performance indicators.|
|Transaction||A transaction that enables an Issuer to issue debt securities in the capital markets. A debt issuance programme that allows an Issuer the continued and flexible issuance of several types of securities in accordance with the programme terms and conditions.|
|Ultimate Payment||A measure of the principal debt, interest, fees and expenses being repaid over a period of time determined by recoveries.|
For a detailed glossary of terms, please click here
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 information received was considered adequate and has been independently verified where possible.
The credit rating has been disclosed to the Issuer and the Arranger with no contestation of the rating.
The rating above was solicited by the Issuer of the Transaction; and therefore GCR has been compensated for the provision of the rating.
The information received from the Arranger and other reliable third parties to withdraw the credit rating included:
- Proof of settlement of the Notes dated 17 October 2017 and formal written correspondence related to the redemption.