NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects to assign the following ratings and Rating Outlooks to the Series 2014 bonds issued by the Niagara Tobacco Asset Securitization Corporation:
--$690,000 serial bond due May 15, 2015 'BBB+sf'; Outlook Stable;
--$755,000 serial bond due May 15, 2016 'BBB+sf'; Outlook Stable;
--$815,000 serial bond due May 15, 2017 'BBB+sf'; Outlook Stable;
--$1,270,000 serial bond due May 15, 2018 'BBB+sf'; Outlook Stable;
--$1,295,000 serial bond due May 15, 2019 'BBB+sf'; Outlook Stable;
--$1,370,000 serial bond due May 15, 2020 'BBB+sf'; Outlook Stable;
--$1,455,000 serial bond due May 15, 2021 'BBB+sf'; Outlook Stable;
--$1,540,000 serial bond due May 15, 2022 'BBB+sf'; Outlook Stable;
--$1,630,000 serial bond due May 15, 2023 'BBB+sf'; Outlook Stable;
--$1,730,000 serial bond due May 15, 2024 'BBB+sf'; Outlook Stable;
--$10,055,000 term bond due May 15, 2029 'BBB+sf'; Outlook Stable;
--$10,025,000 term bond due May 15, 2034 'BBB+sf'; Outlook Stable;
--$12,110,000 term bond due May 15, 2040 'BBBsf'; Outlook Stable.
KEY RATING DRIVERS
Tobacco Industry Rating: Cash flows to the bond trustee are dependent on the Master Settlement Agreement (MSA) payments made by the tobacco companies; as a result, tobacco settlement ABS is capped at 'BBB+sf', which is one notch above Fitch's view of the tobacco industry.
Transaction Structure: The Capital structure of the 2014 bonds as well as credit enhancement in the form of a debt service reserve account is adequate.
Fitch runs different declines in MSA payment scenarios when evaluating the rating sensitivity for tobacco settlement ABS. Even in the most severe stressed scenario of a 30% one-time decline in the MSA payment there is no rating migration among the serial bonds. All term bonds would be downgraded in the moderate stress of a 15% MSA decline. For further discussion of Fitch's sensitivity analysis, please see the related presale report.
The presale report is available to all investors on Fitch's website at 'www.fitchratings.com'. For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at 'email@example.com'.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 2014);
--'U.S. Tobacco Settlement ABS Criteria' (July 2014).
Applicable Criteria and Related Research: Niagara Tobacco Asset
Securitization Corporation, series 2014
Global Structured Finance Rating Criteria - Effective from 20 May 2014
to 4 August 2014
U.S. Tobacco Settlement ABS Criteria