Bangkok--1 Jun--Moody's
Approximately US$187.5 million of proposed CLO securities rated
Moody's assigned prospective rating of (P)Aaa to the Class A notes co-issued by Start IV CLO Limited and Start IV CLO LLC. The proposed transaction is a balance sheet synthetic CLO transaction sponsored and arranged by Standard Chartered Bank (SCB). At the same time, Moody's assigned prospective ratings of (P)Aa1 to Class B notes, (P)A1 to Class C notes, (P)Baa1 to Class D notes and (P)Ba1 to Class E notes co-issued by Start IV CLO Limited and Start IV CLO LLC.
This is SCB's fourth synthetic CLO issuance of its wholesale bank portfolio.
The complete rating action is as follow:
Issuer: Start IV CLO Limited
Co-Issuer: Start IV CLO LLC
US$[82.5
] million Class A credit-linked floating rate notes due [Dec 2011
], rated (P)Aaa;
US$[30.0
] million Class B credit-linked floating rate notes due [Dec 2011
], rated (P)Aa1;
US$[26.25
] million Class C credit-linked floating rate notes due [Dec 2011
], rated (P)A1;
US$[26.25
] million Class D credit-linked floating rate notes due [Dec 2011
], rated (P)Baa1; and US$[22.50
] million Class E credit-linked floating rate notes due [Dec 2011
], rated (P)Ba1.
The prospective ratings are assigned based on information of the portfolio of reference obligations, the expected structure and credit tranching as of 28 May 2007. The final ratings are subject to finalisation of the portfolio and the structure.
In assigning the prospective ratings, Moody's considered the following:
- The credit quality and diversity of the reference portfolio;
- The governing ISDA documentation;
- The level of subordination for the different classes of notes;
- The collateral being placed in cash deposits; and
- The structure of the transaction including the early redemption, enforcement date and early termination.
PROPOSED TRANSACTION SUMMARY
On closing date, SCB, as the swap counterparty, will enter into a CDS with the issuer, Start IV CLO Limited, related to a portfolio of corporate loans (reference portfolio) that meets certain criteria as to creditworthiness and diversity. The issuer is expected to place all proceeds of the notes into cash deposits with Deutsche Bank.
There will be a replenishment period of two and a half years in which SCB can replenish the exposures of certain names that have amortized or replace these names with new ones, both subject to the replenishment criteria being met.
Interest on the notes will be paid quarterly, while principal repayments on the notes can occur prior to the initial redemption date depending on (i) amortization of the underlying loans, (ii) occurrence of early redemption date, or (iii) occurrence of enforcement date.
THE COMPANIES The issuer, Start IV CLO Limited is a public limited company newly incorporated in the Cayman Islands. As some of the notes will be placed with investors in the United States of America, there is a co-issuer in place, Start IV CLO LLC, a limited liability company incorporated in Delaware. The co-issuers have no previous operations and are special purpose vehicles established solely for the purpose of entering into the current transaction. The proposed transaction is sponsored by Standard Chartered Bank (SCB) (A2/P-1). Standard Chartered PLC and its consolidated subsidiaries (Group) is an international banking and financial services group focused on the markets of Asia, Africa and the
Middle East. SCB is the main operating subsidiary of Standard Chartered PLC. The Group provides a wide range of financial products and services to its customers through two main business divisions, consumer banking and wholesale banking.
The provisional ratings are issued in advance of the final ratings and reflect Moody's preliminary credit opinions regarding the transaction only. Moody's makes no representations that the provisional ratings will be the same as the definitive ratings.
Moody's Investors Service is a publisher of rating opinions and research.
It is not involved in the offering or sale of any securities, nor is it acting on behalf of the offering party. This release is not a solicitation or a recommendation to buy, hold or sell securities.
A more detailed analysis of the transaction is available at Moody's web site in the Pre-sale Reports section.
Hong Kong
Myrna Fajardo
VP - Senior Credit Officer
Structured Finance Group
Moody's Asia Pacific Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (852) 2916-1121
Hong Kong
Joe Wong
Associate Analyst
Structured Finance Group
Moody's Asia Pacific Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (852) 2916-1121