OREANDA-NEWS. Fitch Ratings has assigned an 'F1+' rating to the unsecured notes offered under Private Export Funding Corporation's (PEFCO) new $2.2 billion Euro commercial paper (ECP) program. The notes will rank pari passu with all of the other unsecured and unsubordinated indebtedness of PEFCO, and the ECP program augments PEFCO's current domestic CP programs. The rationale behind the ECP program is to enhance distribution of PEFCO's commercial paper and attract European investors to commercial paper of the highest credit quality in light of the current market environment that features negative yield curves in Europe. The ECP program is dollar-denominated, and therefore does not introduce currency risk.

KEY RATING DRIVERS - COMMERCIAL PAPER

PEFCO's Issuer Default Ratings (IDRs) are 'AAA/F1+' and the Rating Outlook is Stable. These ratings are linked to the U.S. sovereign ratings (IDRs of 'AAA/F1+'; Rating Outlook Stable). The U.S.'s export credit agency, the Export-Import Bank of the U.S. (Ex-Im) or other U.S. government institutions whose obligations are backed by the full faith and credit of the U.S. guarantee all loans made by PEFCO and interest on senior-secured debt of PEFCO. These linkages are further articulated in Fitch's report 'Rating Linkages to the U.S. Sovereign Rating', dated July 18, 2011, and the Sovereign Support Section of the report 'Global Non-Bank Financial Institutions Rating Criteria', dated April 28, 2015. For further information on PEFCO, please refer to the press release 'Fitch Affirms PEFCO's LT and ST IDRs at 'AAA/F1+'; Outlook Stable,' dated Nov. 16, 2015.

The 'F1+' rating on PEFCO's ECP program is directly linked to the U.S. sovereign's 'F1+' short-term IDR, based on Fitch's view of the U.S. government's financial support for Ex-Im. PEFCO's short-term IDR of 'F1+' corresponds to its long-term IDR of 'AAA' and reflects Fitch's view that PEFCO has the highest short-term credit quality.

RATING SENSITIVITIES - COMMERCIAL PAPER

PEFCO's ratings are highly sensitive to the U.S. sovereign rating.

An unanticipated shift in PEFCO's fundamental business model towards non-U.S. government guaranteed lending or issuance of long-term unsecured funding would likely alter Fitch's view of support and result in negative rating actions.

Fitch has assigned the following rating:

Private Export Funding Corporation
--$2.2 billion Euro commercial paper program 'F1+'.

Existing ratings for Private Export Funding Corporation are as follows:

--Long-term IDR 'AAA'; Outlook Stable;
--Short-term IDR 'F1+';
--Secured debt 'AAA';
--Commercial paper 'F1+';
--Support '1';
--Support floor 'AAA'.

PEFCO partners with commercial banks and other entities to fund U.S. exports in sectors such as aircraft, energy, small business, equipment, infrastructure and telecommunications. As a privately owned corporation that was created with the support of U.S. Treasury and Ex-Im, PEFCO achieves this mandate by making or purchasing loans in the secondary market from commercial lenders. Ex-Im secured a reauthorization by the U.S. Congress on Dec. 4, 2015 that will be in effect until Sept. 30, 2019.