Announcements

GCR withdraws The Thekwini Fund 11 (RF) Limited Class A, Class B and Class C Notes Ratings on Notes

Johannesburg, 18 July 2018 — Global Credit Ratings (“GCR”) has withdrawn the final, public long-term credit ratings accorded to the following Class A, Class B and Class C Notes issued by The Thekwini Fund 11 (RF) Ltd (the “Issuer”), following the full redemption of the Notes:

Class A2 Notes,
stock code TH11A2;
due 18 July 2041; AAA(ZA)(sf) Stable Outlook;
Class A3 Notes,
stock code TH11A3;
due 18 July 2041; AAA(ZA)(sf) Stable Outlook;
Class A5 Notes,
stock code TH11A5;
due 18 July 2041; AAA(ZA)(sf) Stable Outlook;
Class A6 Notes,
stock code TH11A6;
due 18 July 2041; AAA(ZA)(sf) Stable Outlook;
Class A8 Notes,
stock code TH11A8;
due 18 July 2041; AAA(ZA)(sf) Stable Outlook.
Class B1 Notes
stock code TH11B1;
due 18 July 2041; AA+(ZA)(sf) Positive Outlook;
Class B2 Notes
stock code TH11B2;
due 18 July 2041; AA+(ZA)(sf) Positive Outlook;
Class B3 Notes,
stock code TH11B3;
due 18 July 2041; AA+(ZA)(sf) Positive Outlook;
Class C1 Notes,
stock code TH11C1;
due 18 July 2041; BBB+(ZA)(sf) Positive Outlook;
Class C2 Notes,
stock code TH11C2;
due 18 July 2041; BBB+(ZA)(sf) Positive Outlook;
Class C3 Notes,
stock code TH11C3;
due 18 July 2041; BBB+(ZA)(sf) Positive Outlook.

RATING RATIONALE

The Thekwini Fund 11 (RF) Limited has an amortising R4bn Residential Mortgage Backed Securities Programme (the “Programme”), comprising of home loans originated by SA Home Loans (Pty) Ltd (“SAHL”). The Issuer redeemed an aggregate of R1.85bn in Class A Notes, R0.19bn in Class B Notes, R0.15bn in Class C Notes and R0.07bn in unrated Class D Notes at the Interest Payment Date on 18 July 2018. Following the capital redemption, the Class A, Class B, Class C and Class D Notes (collectively referred to as the “Rated Notes”) were paid in full. Accordingly, GCR has withdrawn the ratings accorded to the designated Class A, Class B and Class C Notes listed above.

The final, public credit ratings accorded to the designated Class A Notes related to timely payment of interest and ultimate payment of principal by the Final Redemption Date, whilst the ratings on all other securities relate to ultimate payment of interest and principal by the Final Maturity 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. The Issuer also redeemed the unrated Class D Notes. For more information regarding the Transaction, please refer to The Thekwini Fund 11 (RF) Limited – R4bn Residential Mortgage Backed Securities Programme Surveillance Report published on 31 May 2018.

RATINGS HISTORY

Stock code
Initial Rating
Long Term Rating
Short Term Rating
Outlook
TH11A2
29 April 2016
AAA(ZA)(sf)
n.a
Stable
TH11A3
29 April 2016
AAA(ZA)(sf)
n.a
Stable
TH11A5
29 April 2016
AAA(ZA)(sf)
n.a
Stable
TH11A6
29 April 2016
AAA(ZA)(sf)
n.a
Stable
TH11A8
29 April 2016
AAA(ZA)(sf)
n.a
Stable
TH11B1
29 April 2016
AA(ZA)(sf)
n.a
Stable
TH11B2
29 April 2016
AA(ZA)(sf)
n.a
Stable
TH11B3
29 April 2016
AA(ZA)(sf)
n.a
Stable
TH11C1
29 April 2016
BBB(ZA)(sf)
n.a
Stable
TH11C2
29 April 2016
BBB(ZA)(sf)
n.a
Stable
TH11C3
29 April 2016
BBB(ZA)(sf)
n.a
Stable
Stock code
Last Rating
Long Term Rating
Short Term Rating
Outlook
TH11A2
24 May 2018
AAA(ZA)(sf)
n.a
Stable
TH11A3
24 May 2018
AAA(ZA)(sf)
n.a
Stable
TH11A5
24 May 2018
AAA(ZA)(sf)
n.a
Stable
TH11A6
24 May 2018
AAA(ZA)(sf)
n.a
Stable
TH11A8
24 May 2018
AAA(ZA)(sf)
n.a
Stable
TH11B1
24 May 2018
AA+(ZA)(sf)
n.a
Positive
TH11B2
24 May 2018
AA+(ZA)(sf)
n.a
Positive
TH11B3
24 May 2018
AA+(ZA)(sf)
n.a
Positive
TH11C1
24 May 2018
BBB+(ZA)(sf)
n.a
Positive
TH11C2
24 May 2018
BBB+(ZA)(sf)
n.a
Positive
TH11C3
24 May 2018
BBB+(ZA)(sf)
n.a
Positive

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 – Feb ’17;

Global Residential Mortgage Backed Securities Rating Criteria – May ’17;

The Thekwini Fund 11 (RF) Limited New Ratings Report – Apr ’16; and

The Thekwini Fund 11 (RF) Limited Surveillance Report – May ’18.

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

Capital The sum of money that is used to generate proceeds.
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.
Loan A sum of money borrowed by a debtor that is expected to be paid back with interest to the creditor. A debt instrument where immovable property is the collateral for the loan. A mortgage gives the lender a right to take possession of the property if the borrower fails to repay the loan. Registration is a prerequisite for the existence of any mortgage loan. A mortgage can be registered over either a corporeal or incorporeal property, even if it does not belong to the mortgagee. Also called a Mortgage bond.
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.
Payment Date The date on which the payment of a coupon is made.
Principal The total amount borrowed or lent, e.g. the face value of a bond, excluding interest.
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.
Securities Various instruments used in the capital market to raise funds.
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.
Surveillance Process of monitoring a transaction according to triggers, covenants and key performance indicators.
Timely Payment The principal debt, interest, fees and expenses being repaid promptly in accordance with the contractual obligation.
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 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:

  • SENS Announcement dated 12 July 2018 and written confirmation of redemption of the Notes and proof of settlement sent to GCR on 18 July 2018

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