The rating of the RPG03 and RPG02 Senior Secured Floating Rate Notes, are valid until 25 November 2014.
The rating of the RMB Guaranteed Notes (Senior Secured Notes) are derived by applying a notching approach, starting from the long term unsecured credit rating of Real People Investment Holdings Limited (‘BBB(ZA)’) with a rating uplift of two national scale notches deemed appropriate for the RMB Guaranteed Notes. The ratings accorded to the RMB Guaranteed Notes relate to the ultimate (as opposed to timely, akin to a loss severity rating therefore) repayment of the principal and interest.
The rating of the RMB Guaranteed Notes incorporate recoveries potentially arising from an enforcement of the RMB Guarantee and Real People Investment Holdings Limited unencumbered assets.
GLOSSARY OF TERMS/ACRONYMS USED IN THIS ANNOUNCEMENT
A rating accorded to the performance of either ultimate or timely payment of obligations.
Credit Rating Agency
A party that provides an opinion on the credit quality of assets, debt securities and companies.
The probability or likelihood that a borrower will not meet it’s debt obligations. Credit Risk can further be separated between current credit risk (immediate) and potential credit risk (deferred).
Floating Rate Notes
Debt securities that have a periodic interest rate reset in relation to the reference rate, i.e. JIBAR.
Johannesburg Interbank Agreed Rate. A reference rate.
A right of retention of someone else’s property due to expensed money or labour on property acquires a lien until payment is made.
The risk that a financial instrument cannot be traded on it’s market price due to the size of the market.
Long Term Rating
A credit rating based on the opinion of the ability to repay long term (more than a year) obligations.
Movable or immovable asset.
A Rating Outlook indicates the potential direction of a rating over the medium term, typically a one to two years period. 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).
Indicates that a rating is under review for possible change in the short-term and the movement may be either positive or negative.
A rate that is the basis of the calculation such as JIBAR.
Short Term Rating
A credit rating based on the opinion of the ability to honour short term (less than a year) obligations.
A unique code allocated to a publicly listed security.
A method of raising funds in the capital markets. A Structured Finance transaction is established to accomplish certain funding objectives whist reducing risk.
Failure to carry out a full review of a rated entity within the designated timeframe, either through lack of information or delays in finalisation, i.e. review is ongoing.
Real People Investment Holdings Limited RMB Guaranteed Notes – RPG02 and RPG03 Senior Secured Notes
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.