Announcements

GCR withdraws The South African Securitisation Programme (RF) Limited Series 1 ERSA17 and ERSA20 Not

Johannesburg, 17 August 2018 — Global Credit Ratings (“GCR”) has withdrawn the final, public long-term credit ratings accorded to the following Class A17 and Class A20 Notes issued by The South African Securitisation Programme (RF) Limited Series 1 (the “Issuer”), following the full redemption of the Notes:

Class A17 Notes,
stock code ERSA17;
due 17 Aug 2018; AAA(ZA)(sf) Stable Outlook;
Class A20 Notes,
stock code ERSA20;
due 17 Aug 2018; AAA(ZA)(sf) Stable Outlook;

RATING RATIONALE

The South African Securitisation Programme (RF) Limited Series 1 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 Issuer redeemed an aggregate of R182,000,000 in Class A17 Notes and R177,000,000 in Class A20 Notes at the Scheduled Maturity Date on 17 August 2018. Following the capital redemption, the Class A17 and Class A20 Notes were paid in full. Accordingly, GCR has withdrawn the ratings accorded to the designated Class A17 and Class A20 Notes listed above.

The final, public credit ratings accorded to the designated Class A17 and Class A20 Notes related to timely payment of interest and ultimate payment of principal by the Final Redemption Date. The ratings excluded an assessment of the ability of the Issuer to pay either any (early repayment) penalties or any default interest rate penalties. For more information regarding the Transaction, please refer to The South African Securitisation Programme (RF) Limited Series 1 – Equipment Lease Backed Securities Programme Surveillance Report published on 28 March 2018.

RATINGS HISTORY

Stock code
Initial Rating
Long Term Rating
Short Term Rating
Outlook
ERSA17
17 December 2015
AAA(ZA)(sf)
n.a
Stable
ERSA20
17 December 2015
AAA(ZA)(sf)
n.a
Stable
Stock code
Last Rating
Long Term Rating
Short Term Rating
Outlook
ERSA17
28 March 2018
AAA(ZA)(sf)
n.a
Stable
ERSA20
28 March 2018
AAA(ZA)(sf)
n.a
Stable

ANALYTICAL CONTACTS

Primary Analyst

Mark Vrdoljak

Senior Structured Finance Analyst

+27 11 784 1771

markvrd@globalratings.net

Secondary Analyst

Tinashe Mujuru

Structured Finance Analyst

+27 11 784 1771

tinashem@globalratings.net

Committee Chairman

Yohan Assous

Sector Head: Structured Finance Ratings

+27 11 784 1771

yohan@globalratings.net

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

Global Master Structured Finance Rating Criteria, updated Feb ’17.

Global Consumer Asset Backed Securitisation (“ABS”) Rating Criteria, updated May ’17.

Global Master Criteria for Rating Banks and Other Financial Institutions, updated Mar ’17.

SASP 1 Tap Issuance Report – Aug ’17.

SASP 1 Surveillance Report – Mar ’18.

GCR’s Sasfin Bank Limited Financial Institution Credit Rating Report – May ’17.

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.

GLOSSARY OF TERMS/ACRONYMS USED IN THIS DOCUMENT AS PER GCR’S STRUCTURED FINANCE GLOSSARY

Asset An item with economic value that an entity owns or controls.
Cash Flow A financial term for monetary changes in operations, investing and financing activities.
Credit Enhancement Limited protection to a transaction against losses arising from the assets. The credit enhancement can be either internal or external. Internal credit enhancement may include: Subordination; over-collateralisation; excess spread; security package; arrears reserve; reserve fund and hedging. External credit enhancement may include: Guarantees; Letters of Credit and hedging.
Creditor A credit provider that is owed debt obligations by a debtor.
Default A default occurs when: 1.) The Borrower is unable to repay its debt obligations in full; 2.) A credit-loss event such as charge-off, specific provision or distressed restructuring involving the forgiveness or postponement of obligations; 3.) The borrower is past due more than X days on any debt obligations as defined in the transaction documents; 4.) The obligor has filed for bankruptcy or similar protection from creditors.
Issuer The party indebted or the person making repayments for its borrowings.
Lease Agreement or temporary use and enjoyment of a corporeal thing (movable or immovable property) the whole or part thereof for rent. The essential elements of a contract of lease are: 1.) Undertaking of lessor to give the lessee the use and enjoyment of something; 2.) Agreement between the lessor and lessee that the lessee’s right to use and enjoyment is temporary; and 3.) Lessee’s undertaking to pay a sum or rent.
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.
Principal The total amount borrowed or lent, e.g. the face value of a bond, excluding interest.
Proceeds Funds from issuance of debt securities or sale of assets.
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).
Receivables General term for economic benefit derived from an asset.
Recourse A source of help in a difficult situation.
Recovery The action or process of regaining possession or control of something lost. To recoup losses.
Refinance The issue of new debt to replace maturing debt. New debt may be provided by existing or new lenders, with a new set of terms in place.
Rent Payment from a lessee to the lessor for the temporary use of an asset.
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.
Secured Creditor A creditor that has specific assets pledged as collateral that will receive the proceeds in the event of default.
Securities Various instruments used in the capital market to raise funds.
Securitisation Is a process of repackaging portfolios of cash-flow producing financial instruments into securities for sale to third parties.
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.
Timely Payment The principal debt, interest, fees and expenses being repaid promptly in accordance with the contractual obligation.
Tranche In a structured finance, a slice or portion of debt securities offered that is structured or grouped to resemble the same degree of risk associated with the underlying asset or with a similar degree of risk. A junior tranche has a higher degree of default risk than a senior tranche.
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 ratings was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the ratings is for a maximum of 12 months, or earlier as indicated by the applicable credit ratings document.

The Servicer participated in the rating process via face-to-face meetings and other written correspondence.

The credit ratings have been disclosed to the Servicer with no contestation of the ratings.

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.

The information received from the Issuer and other reliable third parties to accord the credit ratings included:

  • JSE market notice dated 3 August 2018 and STRATE confirmation of the redemption of the Notes.

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