Fitch Rates Avenir B.V. Series 2016-1 Secured Guaranteed Notes 'BBB+sf'; Outlook Stable
OREANDA-NEWS. Fitch Ratings has assigned Avenir B.V.'s EUR71.7m Series 2016-1 secured guaranteed notes due 2022 a 'BBB+sf' rating with a Stable Outlook.
KEY RATING DRIVERS
The rating addresses the timely payment of interest on the notes according to the terms and conditions of the documentation, as well as the repayment of principal by legal final maturity in January 2022.
The rating reflects the credit quality of two risk-presenting entities as well as the issuer's legal and financial structure. The two risk-presenting entities are Mediobanca - Banca di Credito Finanziario S.p.A. (BBB+/Stable/F2), the swap counterparty and the Bank of New York Mellon, S.A./N.V., London Branch (Bank of New York Mellon Corporation (The); AA-/Stable/F1+), the custodian.
At closing, the proceeds from the notes' issuance were used to purchase EUR71.7m EIFFARIE S.A.S. loans and the issuer has entered into an asset swap with Mediobanca - Banca di Credito Finanziario S.p.A. The issuer pays the swap counterparty all interest and principal received on the loans and the swap counterparty pays a floating-rate of six-month Euribor (with floor at zero) plus 1% interest payment to the issuer who in turn pays the investors from the issue date to the swap termination date in December 2021.
The swap payment to the issuer is increased by any positive interest rates or decreased by any negative interest rates or charges applied by the custodian to the account. The loan amortises in instalments on a predefined schedule, with a final redemption amount in December 2021, and the swap counterparty pays the actually received loan amount to the issuer to redeem the notes. The legal maturity of the notes is 13 January 2022.
The notes are issued by Avenir B.V., a repackaging note programme arranged by Mediobanca - Banca di Credito Finanziario S.p.A. with limited liability and incorporated under Dutch law. Non-petition language included in the master programme warrants that no party to any series will be able to petition for the winding-up of the issuer as a consequence of the default of any particular series. In addition, limited recourse clauses in the programme restrict the noteholder of a given series to only have recourse to the collateral assigned to this series.
Fitch monitors the performance of the underlying risk-presenting entities and adjusts the rating of the transaction accordingly. Fitch tested the impact of a one-notch downgrade of the weakest entity Mediobanca - Banca di Credito Finanziario S.p.A., which would lead to a downgrade of the notes by one notch.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
The source of information used to assess this rating was the arranger.