Mmela Mobility Finance (RF) Limited – Ratings Placed Under Review
Johannesburg, 15 June 2018 — Global Credit Ratings (“GCR”) has placed the final, public long-term credit ratings accorded to the Class A Notes, Class B Notes and Class C Notes issued by Mmela Mobility Finance (RF) Ltd (“the Issuer” and “the Transaction”) ‘Under Review’. GCR expects to publish an updated on the ratings by 16 July 2018. The ratings remain on Rating Watch.
The final, public credit ratings accorded to the Secured Class A Notes 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.
GCR issued a Ratings Watch on the Class A Notes, Class B Notes and Class C Notes on 15 December 2017 due to being advised by the Administrator, Redinkcapital (Pty) Ltd, and the Security SPV of the Transaction that a Servicer Default notice has been served to the Servicer, MFS, on 1 December 2017. The Servicer disputed the notice. Following this event, CSS Credit Solutions Services (Pty) Ltd (“CSS”) has been the appointed Servicer.
Subsequent to the event, Noteholders consented to the Extraordinary Resolution Number 1 which had an Optional Redemption of R50m in capital on 16 April 2018 and allowed for interest on the Notes to be paid on any Payment Date (from quarterly to monthly). This was followed by another capital repayment of R100m on 15 June 2018. The Issuer continued to make timely monthly interest payments on 15 March, 16 April, 15 May and 15 June 2018. A total of R150m in capital repayment to the Class A Notes, Class B Notes and Class C Notes resulted in a 34.71% proportional repayment of the originally issued Notes (R435m).
GCR met with MFS on 12 June 2018 and conducted a teleconference with the Issuer on 14 June 2018. GCR also continued regular engagements with the Administrator (Redinkcapital (Pty) Ltd).
The conclusions from the discussions are that the parties have committed to cooperate with one another to see to smooth transition to the current servicer, CSS, to fully execute their duties per the Servicing Agreement, appropriate access and correct data be shared between the parties.
GCR hereby states that it holds no view, nor does it participate in any manner whatsoever, on the validity of the abovementioned dispute. However, GCR will continue to monitor the performance of the Transaction insofar as it relates to timely payment of interest and ultimate payment of principal on the Secured Class A Notes and the ultimate payment of interest and ultimate payment of principal of the other rated securities, and communicate any action on or before 16 July 2018. The Transaction was initially scheduled to be reviewed by 19 January 2018.
CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.
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