Bangkok--4 Nov--Standard & Poor's
MELBOURNE (Standard & Poor's) Nov. 4, 2015--Standard & Poor's Ratings Servicestoday lowered its ratings on the class A-3 notes issued by VIRTUE Trust and aclass of notes issued by VIRTUE Trust II. We lowered both ratings to 'AA-(sf)' from 'AA (sf)'. At the same time, we removed the VIRTUE Trust notes fromCreditWatch with negative implications and the VIRTUE Trust II notes from
CreditWatch with developing implications, where both were placed on May 20,2015.
These actions are the result of us lowering to 'A+/Negative/A-1' from'AA-/Negative/A-1+' our rating on Cooperatieve CentraleRaiffeisen-Boerenleenbank B.A. (Rabobank Nederland), which remains the
interest-rate swap provider in both transactions. According to provisions inthe transaction documents, the counterparty must undertake to replace itselfif its rating falls below 'A-1+'. The role of guaranteed investment contract(GIC) provider for VIRTUE Trust and VIRTUE Trust II was novated to Westpac
Banking Corp. (Westpac) from Rabobank Nederland on April 2, 2015. We believethat the manager and counterparty have made efforts to arrange novation of theswaps to an appropriately rated counterparty. With regard to the time taken todate and the lack of certainty regarding the completion date, however, webelieve the lowered ratings reflect the risks associated with the relevantcounterparty ratings.
The notes are asset-backed transactions that are backed by rolling stockleases related to trams and trains, supported by the State of Victoria.Rabobank Nederland is counterparty to the transaction.