FITCH ASSIGNS ALLIANCE BANK DPR SERIES 2006 NOTES AAA'/'BBB-' EXPECTED RATINGS
19.10.06 20:50
/Fitch Ratings-London-19 October 2006/ -Fitch Ratings has today assigned
Alliance DPR Company's upcoming issues of Series 2006-A notes an
expected rating of 'AAA' and Series 2006-B notes an expected rating of 'BBB-
(BBB minus). Alliance DPR Company has been assigned an Issuer Default
rating of 'BB+'. The diversified payment rights ("DPR") future flow transaction
has been originated by Alliance Bank ('BB-' (BB minus)/'B'/Stable Outlook).
The 'AAA' expected rating is based on the 2006-A notes having a full interest
and principal guarantee from the Asian Development Bank
('AAA'/'F1+'/Stable Outlook) while the standalone underlying expected rating
of these notes is 'BBB-' (BBB minus).
The final ratings are contingent upon receipt of final documents conforming to
information already received.
"This transaction has the tight structuring that has made DPR future flows
such a staple of emerging markets issuance," says Wasif Kazi, Director
within the Emerging Markets Structured Finance team in London. "In addition,
the cash-trapping mechanism, which is triggered when flows fall from a high
to an intermediate level, reduces the loss given default should the transaction
not perform."
The ratings are based on Fitch's long-established methodology for rating
future flow transactions and address performance risk with respect to the
generation of sufficient receivables, the mitigation of diversion risk and
structural protections available to noteholders. All these factors justify ratings
above the bank's Issuer Default rating of 'BB-' (BB minus). In addition, the
underlying ratings of both series benefit from a contingent reserve
mechanism, which enhances recovery rates and therefore justifies the notes'
higher ratings than the 'BB+' Issuer Default rating of Alliance DPR Company.
Alliance Bank is the fourth largest bank in Kazakhstan by deposits, and its
diversified corporate customer base means that the bank channels a large
volume of hard currency inflows into Kazakhstan as a result of export sales. A
portion of these flows that are transferred via SWIFT MT-100 type messages
constitutes the collateral for this transaction.
Fitch's recovery-based approach to future flow transactions was set out in a
criteria piece entitled "Rating Future Flow Transaction and Recovery Rates"
dated 15 February 2006 and available at www.fitchratings.com.
The pre-sale report is available on the agency's public website,
www.fitchratings.com.
Contact:
Wasif Kazi, London, Tel: +44 20 7862 4168;
Nick Eisinger, London, Tel: +44 20 7417 4341.
Media Relations:
Mayra Cunningham, London, Tel: +44 20 7417 3557.
[2006-10-19]