Bangkok--4 Jun--Moody's
Moody's Investors Service has today taken rating actions on the notes issued by Silver Maple Investment Corporation Ltd ("Silver Maple").
The notes were placed on review for possible downgrade on March 1, 2010, prompted by the lack of sufficient liquidity, according to Moody's latest guidelines on the minimum liquidity protection for Singapore CMBS transactions.
Today's rating actions -- which conclude the review -- are as follows:
Issuer: Silver Maple Investment Corporation Ltd
....US$72,100,000 Series 018 Floating Rate Notes due December 2011, Confirmed at Aaa; previously on March 1, 2010 Aaa Placed Under Review for Possible Downgrade
....US$255,500,000 Series 025 Floating Rate Notes due April 2014, Downgraded to Aa1; previously on March 1, 2010 Aaa Placed Under Review for Possible Downgrade
....?175,000,000 Series 030 Floating Rate Notes due April 2014, Downgraded to Aa1; previously on March 1, 2010 Aaa Placed Under Review for Possible Downgrade
The notes' expected maturities are June 2010 for Series 18 and October 2012 for Series 25 and 30.
Silver Maple is sponsored by CapitaMall Trust ("CMT"), a Singapore REIT ("S-REIT'). CMT is rated A2 with a negative outlook.
The risk of insufficient liquidity arises from the fact that CMT is an operating entity and is not bankruptcy remote. It has other creditors and if it defaults on those obligations, these other parties can bring legal action, including bankruptcy proceedings, against it. If that happens, there may be cash flow disruption upon a mortgage loan event of default.
To ensure timely payments on CMBS transactions, Moody's has published a guideline stating that the minimum level of liquidity protection should be sufficient to cover the senior payment obligations of the CMBS issuer for a period equal to at least six months. The rating of a transaction lacking sufficient liquidity will be linked to the rating of the sponsoring S-REIT. The degree of rating linkage will be subject to the existing liquidity arrangement, the S-REIT's profile, and the remaining term to maturity.
The Series 18's notes have an expected maturity in June 2010, and CMT already has the available funds to repay the mortgage loan, and thereby the notes on the expected maturity date. The rating on the notes of Series 18 is therefore confirmed at Aaa.
For Series 25 and 30, as there is no liquidity in the transaction, the ratings on the notes are therefore linked to the rating of CMT. After taking into consideration the notes' expected maturity in October 2012 and the A2 rating of CMT, Moody's downgraded the notes rating to Aa1 from Aaa.
The principal methodologies used in rating and monitoring the transaction are "Moody's Approach to Rating Large Loan/Single Borrower Transactions"
(July 2000) and "Moody's Approach to Evaluating Singapore CMBS Liquidity Arrangement" (March 2010), which can be found at www.moodys.com in the Research & Ratings directory, in the Rating Methodologies subdirectory.
Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Rating Methodologies subdirectory.
Moody's also publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck.
Hong Kong
Jerome Cheng
VP - Senior Credit Officer
Structured Finance Group
Moody's Asia Pacific Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (852) 3551-3077
Hong Kong
Marie Lam
VP - Senior Credit Officer
Structured Finance Group
Moody's Asia Pacific Ltd.
JOURNALISTS: (852) 2916-1150
SUBSCRIBERS: (852) 3551-3077