TEXT-Fitch cuts SMART SME CLO 2006-1
July 20 – Fitch Ratings has downgraded SMART SME CLO 2006-1′s notes, as follows:
EUR87m class A notes (ISIN: XS0276638938): downgraded to ‘AAsf’ from ‘AAAsf’;
Negative Outlook
EUR118.9m class B notes (ISIN: XS0276639407): downgraded to ‘BBBsf’ from
‘BBB+sf’; Negative Outlook
EUR45m class C notes (ISIN: XS0276640082): downgraded to ‘BBsf’ from ‘BB+sf’;
Negative Outlook
EUR49.3m class D notes (ISIN: XS0276640595): downgraded to ‘Bsf’ from ‘B+sf’;
Negative Outlook
EUR58m class E notes (ISIN: XS0276640835): affirmed at ‘CCsf’; assigned Recovery
Estimate (RR) of ‘RE0%’
The downgrades reflect the exposure to Spanish and Italian assets that make up
20.2% and 3.3% respectively of the total pool volume as of 31 March 2012. Fitch
regards assets from Spain and Italy as more vulnerable given the economic
conditions in both countries. Further, in the agency’s view, the transaction is
exposed to significant refinancing risk since all the loans are scheduled to
mature within the short period of time until scheduled maturity. Additionally,
the lowest-rated bucket that comprises assets rated at or below ‘iCCC’ rated
according to Deutsche Bank’s (DB) internal rating scale remains at a high level.
Although the share of this bucket relative to the portfolio volume has not
changed over the past year, it remains at
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