OREANDA-NEWS. Fitch Ratings has affirmed PICTS plc's fixed-rate notes as follows:

GBP152.4m fixed-rate notes (ISIN XS00202417134), due March 2039: affirmed at 'Asf'; Outlook Negative

The transaction is a securitisation of rental income derived from a property located at 33 Old Broad Street, London, which benefits from a 35-year lease to Bank of Scotland, the obligations of which are guaranteed by Halifax Bank of Scotland (HBOS).

KEY RATING DRIVERS
The rating affirmation reflects that of Lloyds Banking Group (LBG) plc (see "Fitch Affirms Lloyds Banking Group's IDRs and VR", dated 24 July 2014, on www.fitchratings.com), of which HBOs is a wholly owned subsidiary.

At closing, the note issue was EUR153.2m The property had a market value of GBP134.7m and a vacant possession value of GBP91m. The collateral occupies a prime location and comprises 17,865 square metres of office space. The bond issue had a loan-to-vacant possession value ratio of 167.5% and is scheduled to fully amortise from rental income, starting from the April 2014 interest payment date. Since Fitch's last rating action, the notes have amortised by EUR724,000.

RATING SENSITVITIES
The notes are credit-linked to HBOS's rating, and therefore LBG's. Changes to LBG's rating are likely to affect the rating of the notes.

Fitch will continue to monitor the performance of the transaction.