CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed the following senior secured notes issued by MAEXIM Secured Funding Limited:
--Class A1 notes at 'AAA';
--Class A2 notes at 'BB+'.
The Rating Outlook is Stable.
The transaction is backed by euro-denominated notes (collateral securities) issued by the Hungarian Export-Import Bank (Eximbank) under its EUR2 billion Global Medium Term Note Programme (MTN Programme). The collateral securities are unconditionally and irrevocably guaranteed by the government of Hungary.
The Multilateral Investment Guarantee Agency (MIGA) has provided a guarantee to MAEXIM for 95% of the scheduled payments due under the collateral securities. The MIGA contract of guarantee only relates to the collateral securities, but as the schedule coupon and principal payments on the class A1 notes represent 95% of the schedule payments of the collateral securities, the class A1 notes are fully covered by the payments received under the MIGA contract of guarantee.
The ratings address the timely payment of interest on a semi-annual basis and payment of principal at legal maturity on Feb. 15, 2019.
KEY RATING DRIVERS
The affirmation of the rating assigned to the class A1 notes reflects the contract of guarantee, the credit quality of MIGA, and the structural features of the transaction. In addition, the affirmation reflects the timely payment of the notes from the proceeds received under the collateral securities. To date, all timely payments have been made on the collateral securities and no claims have been submitted to MIGA.
The rating affirmation of the class A2 notes reflects Fitch's rating affirmation of the collateral securities, which benefit from the unconditional and irrevocable guarantee by Hungary. On June 6, 2014, Fitch affirmed Hungary's long-term foreign currency Issuer Default Rating (IDR) at 'BB+'/Outlook Stable taking into consideration its external financial vulnerabilities, a nascent economic recovery, persistently high public debt and weakness and uncertainty in the banking sector.
Additionally, the transaction continues to benefit from a EUR2.25 million expense reserve sufficient to cover any costs expected to be incurred during the life of the transaction, including potential legal costs.
RATING SENSITIVITIES
The rating of the class A1 notes is directly linked to the credit quality of MIGA, the guarantee provider. A change in Fitch's assessment of the credit quality of MIGA would automatically result in a change in the rating on the class A1 notes. Any change on Fitch's view on the contract of guarantee, or deterioration on the credit quality of the counterparties may result in a downgrade to the notes.
The rating of the class A2 notes reflects the credit quality of the collateral securities. Any change to the IDR of Hungary and as a consequence to Eximbank's IDR or the notes issued under Eximbank's IDR or the notes issued under Eximbank's MTN program would cause a change to the rating of the class A2 notes.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--Global Structured Finance Rating Criteria - Aug. 4, 2014;
--Counterparty Criteria for Structured Finance and Covered Bonds - May 14, 2014;
--Criteria for Rating Caps in Global Structured Finance Transactions - May 28, 2014;
--MAEXIM Secured Funding Limited - Oct. 25, 2013;
--Hungarian Export Import Bank - Jan. 13, 2014.
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Criteria for Rating Caps and Limitations in Global Structured Finance Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781
MAEXIM Secured Funding Limited
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=721994
Hungarian Export Import Bank
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701489
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=882874
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