OREANDA-NEWS. Fitch Ratings has assigned Fondo de Titulizacion del Deficit del Sistema Electrico FTA's (FADE) tap issuance final ratings, as follows:

EUR287m Series 20 Tap 1 notes, (ES0378641197): 'BBB+; Stable Outlook
EUR180m Series 21 Tap 2 notes, (ES0378641205): 'BBB+; Stable Outlook

FADE is a government sponsored securitisation platform that issues securities backed by the electricity tariff deficit (TD) cash flows in Spain. The issuance proceeds are being used for the refinancing of Series 13, which matures on 17 December 2015. Series 20 maturity date is 17 September 2017 and pays and annual fixed interest rate of 1.875%. Series 21 maturity date is 17 September 2019 and pays an annual fixed interest rate of 0.85%.

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 20 Tap 1 and 21 Tap 2 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 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 EUR26bn. Including Series 20 Tap 1 and 21 Tap 2 issuance, the outstanding amount of FADE bonds is EUR21.47bn.

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.
- EUR287m Series 20 Tap 1, (ES0378641197) final terms and conditions.
- EUR180m Series 21 Tap 2, (ES0378641205) final terms and conditions.
- The documentation issued by the Spanish Treasury which acknowledges the Series 20 Tap 1 and Series 21 Tap 2 issuance within the scope of the government guarantee.
- 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 and Comision Nacional de los Mercados y La Competencia, which Fitch regularly monitors to maintain the ratings.