NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects to rate the following guaranteed notes:
--$93,029,972 fixed rate Guaranteed Global Notes due 2027 'AA-sf' (EXP); Outlook Stable.
Proceeds of the Navig8 Chemical Tankers (A-Ships) Inc (the borrower and the issuer) notes will be used by the issuer to refinance outstanding KEXIM guaranteed bank notes, which closed under a financing in January 2015, with the issuance of the KEXIM guaranteed global notes. Along with other tranches in the original transaction, the proceeds of the bank notes were used to finance a portion of the contract price of 14 chemical tankers. Pursuant to the issuer's election to exchange the outstanding bank notes for the global notes, proceeds of the initial sale of the global notes will be used by the initial purchasers to acquire the bank notes, which will then be simultaneously exchanged by the issuer for the global notes.
The indenture trustee, Wilmington Trust, National Association (IDR 'A/F1'; Outlook Stable) and KEXIM (IDR 'AA-/F1+'; Outlook Stable) entered into a guaranteed agreement whereby KEXIM guarantees, in favor of the indenture trustee, principal, 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 delay 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 will also be obligated make any applicable make-whole payment.
KEY RATING DRIVERS
The rating of the notes is credit-linked to KEXIM's Long-term Issuer Default Rating (IDR) as guarantor. Fitch has not formed a credit opinion on the underlying borrowers, the issuer, or the parent guarantors.
The rating of the notes is credit-linked to the rating of KEXIM, as guarantor of the notes. The analysis does not rely on cash flows received from the underlying loans, nor does it rely on the mortgaged tankers, and therefore there is no reliance on the isolation of assets for the purposes of this analysis. Navig8 Chemical Tankers (A-Ships) Inc. 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, however, that the transaction is structured so that any payments made by KEXIM to the trustee under the guarantee are isolated from the issuer and its parents, affiliates and subsidiaries, and are therefore de-linked from these entities.
A downgrade of KEXIM's IDR would automatically result in a downgrade of the notes.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
Additional information is available at www.fitchratings.com.
Navig8 Chemical Tankers (A-Ships) Inc.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
Global Rating Criteria for Single- and Multi-Name Credit-Linked Notes (pub. 08 Mar 2016)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
Dodd-Frank Rating Information Disclosure Form