OREANDA-NEWS. Fitch Ratings has assigned Fondo de Titulizacion del Deficit del Sistema Electrico FTA's (FADE) Series 21 Tap 1 notes an expected rating as follows:

EUR150m Series 21 Tap 1 notes (ES0378641205): 'BBB+(EXP)'; Stable Outlook

FADE is a government-sponsored securitisation platform that issues securities backed by electricity tariff deficit (TD) cash flows in Spain. The Series 21 Tap 1 issue proceeds, together with the issue of a new series (Series 22), will be used for the refinancing of Series 13, which matures on 17 December 2015. Series 21 Tap 1 maturity date is 17 September 2019 and pays an annual fixed interest rate of 0.85%.

The final rating is contingent on the receipt of final documents conforming to information already received.

KEY RATING DRIVERS
All FADE bonds are credit-linked to Spain's Issuer Default Rating (BBB+/Stable), as they benefit from an explicit and irrevocable guarantee from the government. The Series 21 Tap 1 and Series 22 issuance have no rating impact on the outstanding Series 3, 4, 10, 13, 14, 16, 17, 18, 19, 20 and 21 rated by Fitch, as the terms of the guarantee will remain unaltered.

The FADE programme is exposed to refinancing risk because the underlying TD receivables are collected over a horizon of approximately 15 years, while all FADE bonds have bullet maturities and cash flow mismatches between assets and liabilities are expected to result. In Fitch's view, the FADE programme's ability to roll over its scheduled amortisation is commensurate with Spain's sovereign risk.

All FADE bonds are exposed to the administrative capabilities of Titulizacion de Activos SGFT SA (TdA, the management company) as issuer trustee. Fitch views this operational risk as low based on the broad experience of TdA. The government body (Comision Interministerial) created to oversee the whole process has the power to replace the management company if it fails to perform its duties.

RATING SENSITIVITIES
Because the ratings are credit-linked to Spain, any change in the sovereign IDR is likely to lead to a change in the bonds' rating.

Changes on the terms of the full and unconditional guarantee from the Spanish government could affect the ratings on FADE bonds. The FADE programme can issue series of bonds up to an outstanding balance limit of EUR26.00bn. Including Series 21 Tap 1 and Series 22 of FADE bonds, the outstanding amount of FADE bonds is EUR21.00bn.

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.

DATA ADEQUACY
Fitch sought to receive a third party assessment conducted on the asset portfolio information, but none was available for this transaction. Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.

SOURCES OF INFORMATION
The information below was used in the analysis.
- Series 21 Tap 1 preliminary terms and conditions.
- All customary representations and warranties provided by the transaction documents at closing in January 2011, including a) transferability of assets to the SPV, b) enforceability, c) regulatory compliance, d) no fraud, e) no default.
- TD trends and reports provided by Asociacion Espanola de la Industria Electrica (UNESA) and Comision Nacional de los Mercados y La Competencia (CNMC). The TD trends and reports are regularly monitored by Fitch to maintain the ratings.