NEW YORK--()--Fitch Ratings has assigned a rating of 'A' to Bank of America Corporation's (BAC) issuance from its Secured Asset Finance Company B.V. of $100,000,000 series 2013-3 secured notes due 2016. Repayment of these notes is unconditionally guaranteed by BAC.
RATING ACTION AND RATIONALE
Secured Asset Finance Company B.V. is unconditionally guaranteed by BAC and therefore the debt level rating of 'A' would change in conjunction with any changes to BAC's Issuer Default Ratings (IDRs). BAC's IDRs were affirmed on Oct. 10, 2012 with a Stable Outlook as part of Fitch's Global Trading and Universal Bank (GTUB) periodic review. BAC's IDRs are underpinned by the prospect of U.S. government support in the event of need. BAC's IDRs could be negatively pressured if Fitch's view of support changes. Please see 'Fitch Affirms Bank of America's Ratings at 'A/F1'; Rating Outlook is Stable' dated Oct. 10, 2012 for additional details.
The rating on the notes is based entirely on the ratings of BAC. Fitch has given no consideration to any collateral provided, as Fitch has not evaluated, nor does it expect to review, the collateral policy or collateral assets backing the notes. Because BAC has fully and unconditionally guaranteed the due and punctual payment of all obligations of Secured Asset Finance Company B.V., it is Fitch's view that the notes rank pari passu with senior, unsecured obligations of BAC.
Fitch acknowledges that the issuance is backed by collateral, but given that the collateral for the issuance can be substituted at any time according to the terms of the issuance, Fitch does not believe that the rating benefits from any uplift from the underlying collateral and equalizes the rating with BAC's senior unsecured debt rating due to the guarantee.
RATING DRIVERS AND SENSITIVITIES - VRs and IDRs:
The rating of this issuance is sensitive to any changes in the IDR of BAC. Ratings will move up or down in tandem with BAC's senior unsecured debt ratings.
Support Ratings and Support Floor Ratings:
RATING DRIVERS AND SENSITIVITIES - Subordinated Debt and Other Hybrid Securities:
RATING DRIVERS AND SENSITIVITIES - Holding Company:
RATING DRIVERS AND SENSITIVITIES - Subsidiary and Affiliated Company Rating:
Fitch has assigned the following ratings:
Secured Asset Finance Company B.V.
--Senior debt at 'A'.
Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
In addition to the source(s) of information identified in Fitch's Master Criteria, these actions were additionally informed by information provided by the companies.
Applicable Criteria and Related Research:
--'Risk Radar' (Jan. 16, 2013);
--'U.S. Banks: Rationalizing the Branch Network (Witness the Incredible Shrinking Branch Network)' (Sept. 17, 2012);
--'U.S. Banks: Mortgage Representations and Warranties (Banks Increase Reserves; Uncertainty Remains)' (Aug. 20, 2012)
--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);
--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012);
--'Treatment of Unrealized Losses in U.S. Bank Capital Rule Proposal (Pro-Cyclical Capital Policy to Create Greater Capital Volatility for Banks)' (Aug. 7, 2012);
--'Basel III: Return and Deleveraging Pressures' (May 17, 2012);
--'Assessing and Rating Bank Subordinated and Hybrid Securities' (Dec. 05, 2012).
Applicable Criteria and Related Research
Risk Radar Update
U.S. Banks: Rationalizing the Branch Network (Witness the Incredible Shrinking Branch Network)
U.S. Banks: Mortgage Representations and Warranties (Banks Increase Reserves; Uncertainty Remains)
Global Financial Institutions Rating Criteria
Rating FI Subsidiaries and Holding Companies
Treatment of Unrealized Losses in U.S. Bank Capital Rule Proposal (Pro-Cyclical Capital Policy to Create Greater Capital Volatility for Banks)
Basel III: Return and Deleveraging Pressures
Assessing and Rating Bank Subordinated and Hybrid Securities