It is also based on the asset percentage (AP) that will be applied in the
asset coverage test, which is expected to be lower than or equal to Fitch's breakeven AP of 93%.
The 'AAA' covered bond rating is based on DBS's Long-Term Issuer Default Rating (IDR) of 'AA-', an IDR uplift of zero notches, a payment continuity uplift (PCU) of six notches, a recovery uplift of one notch and the asset percentage (AP) used in the
asset coverage test (ACT) that is equal to Fitch's 'AAA' breakeven AP of 85.0%.
To protect the interests of the Sukuk holders, the transaction includes an
asset coverage test (ACT) to ensure that the OC is maintained at a minimum of 37.7 per cent, as well as various stop-issuance triggers to stop further issuance.
The ratings agency said that the key drivers were the CBA's long term Issuer default rating (IDR) of 'AA-' and the assets percentage used in the
asset coverage test of 85.5 percent.
However, the issuer complies with the programme's dynamic
asset coverage test ensuring that the current AP cannot exceed the supporting AP for the assigned rating.
The 'A+' rating of the covered bonds is based on Co-op's Long-Term Issuer Default Rating (IDR) of 'B', an IDR uplift of two notches, a Payment Continuity Uplift (PCU) of six notches and the asset percentage (AP) Fitch relies upon at 77.5% (AP used in the
asset coverage test published in the investor report), which provides more protection than the 'A+' breakeven AP of 92.5%.
To protect the interests of the Sukuk holders, the transaction includes an
asset coverage test (ACT) to ensure that the OC is maintained at a minimum of 39 per cent, as well as various stop-issuance triggers to stop further issuance.
It is also based on the asset percentage (AP) used in the
asset coverage test (ACT) that Fitch relies on in its analysis (90.5%), which provides more protection than Fitch's 'AAA' breakeven AP of 92.0%.
To protect the interests of the Sukuk holders, the transaction includes an
asset coverage test (ACT) to ensure that the OC is maintained at the minimum level of 37 per cent as well as various Stop-Issuance Triggers to stop further issuances.
The rating is based on CBA's Long-Term Issuer Default Rating (IDR) of 'AA-', an IDR uplift of zero notches, a payment continuity uplift (PCU) of six notches, a recovery uplift (RU) of one notch and the asset percentage (AP) of 92.5% used in the programme's
asset coverage test, which Fitch relies upon in its analysis.
To protect the interests of the Sukuk holders, the transaction includes an
asset coverage test (ACT) to ensure that the OC is maintained at the minimum level of 17.9 per cent as well as various Stop-Issuance Triggers to stop further issuance.
Should the MRPS
Asset Coverage Test or Fitch OC Test decline below their minimum threshold amounts, the governing documents of the reorganized fund require it to cure the breach by altering the composition of the portfolio toward assets with lower discount factors (for Fitch OC Tests breaches), or by reducing leverage in a sufficient amount (for both the Fitch OC Tests and
Asset Coverage Test breaches) within a pre-specified time period.