Fitch Rates Secured Notes Issued by Hai Jiao 1400 Limited
OREANDA-NEWS. Fitch Ratings assigns an 'AA-sf' rating to the following Hai Jiao 1400 Limited's guaranteed notes:
--$200,000,000 fixed rate secured notes due 2025.
The Rating Outlook is Stable.
Proceeds of the Hai Jiao 1400 Limited (the issuer) notes will be used to refinance a portion of the contract price of two liquefied natural gas vessels. The note issuance is part of a financing that includes an ECA loan from the Export Import Bank of Korea (KEXIM; IDR 'AA-'/Outlook Stable/'F1+')and a commercial loan.
The indenture trustee, Wilmington Trust, National Association (IDR 'A'/Outlook Stable/'F1') and KEXIM entered into a guarantee agreement whereby KEXIM guarantees, in favor of the indenture trustee, principal and accrued and unpaid interest due on the outstanding notes, should the issuer miss a payment. KEXIM will also pay interest accrued on the amount due through the payment date, as there could be a lag of up to 14 business days between a missed payment and the date the payment is made. If KEXIM opts to accelerate its payment of the outstanding principal amount of the notes, it may also be obligated make any applicable make whole payment.
KEY RATING DRIVERS
The rating for the notes is credit-linked to KEXIM's Long-term IDR as guarantor. Fitch has not formed a credit opinion on the underlying borrowers, the issuer, or the parent guarantors.
The analysis does not rely on cash flows received from the underlying loans, or the mortgaged vessels, and therefore is not reliant on the isolation of assets for the purposes of this analysis. In addition, the issuer is not deemed to be bankruptcy remote pursuant to Fitch's Global Structured Finance Rating Criteria, and therefore, in Fitch's view, the issuer is not structured to be isolated from bankruptcy risk. Fitch's analysis recognizes that the transaction is structured so that any payments made by the borrowers under the loan and KEXIM under the guarantee to the Trustee are isolated from the issuer and its parents, affiliates and subsidiaries.
The indenture allows for up to a 14 business day delay in payment. As described in Fitch's Criteria for Rating Caps and Limitations in Global Structured Finance Transactions, Fitch generally will not assign a high investment grade rating to notes that exhibit significant vulnerability to interest deferrals. Given that interest will accrue on the notes during any delay period, Fitch believes that the noteholders will be in a substantially similar economic position as they would have been had the delay not occurred. In addition, Fitch does not deem the potential deferral period as excessive.