Fitch Affirms MARC Finance M584 Notes at 'BBB+sf'; Outlook Positive
JPY5bn Series M584 repackaged notes due 2018 affirmed at 'BBB+sf'; Outlook Positive
As of 19 July 2016
KEY RATING DRIVERS
The rating reflects the first-to-default risk associated with the two risk-presenting entities in this transaction. The referenced risks are related to the collateral; a subordinated bond (A-); and the swap counterparty, BNP Paribas (A+/Stable), London branch.
The notes' rating has been affirmed as there have been no changes in the Long-Term IDR of the swap counterparty or the ratings of the collateral securities since the previous rating action in July 2015. The Positive Outlook reflects Fitch's view that the creditworthiness of the collateral securities is likely to be upgraded over the medium term if current trends persist.
RATING SENSITIVITIES
The rating of the notes is sensitive to rating migration of the two risk-presenting entities. Based on the applicable criteria, a one-notch downgrade of the collateral securities would result in a one-notch downgrade of the notes, while a one-notch downgrade of the swap counterparty would not affect the ratings on the notes. A one-notch upgrade of either party would lead to a one-notch upgrade of the notes. This sensitivity only describes the matrix-implied rating impact, and it should not be used as an indicator of possible future performance.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.
DATA ADEQUACY
The collateral securities and the swap counterparty are rated by Fitch. Fitch has relied on the practices of the relevant Fitch groups to assess the collateral and entity information.
Overall, Fitch's assessment of the collateral information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.
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