CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed Salvadoreno DPR Funding Ltd's series 2004-1 A&R and series 2004-2 notes at 'BBB+'. The Rating Outlook is Stable.
The transaction is a securitization of existing and future U.S. dollar-denominated diversified payment rights (DPRs) originated by Banco HSBC Salvadoreno (HSBCSal) in El Salvador. Upon their generation, the trust will have rights to the DPRs through accounts maintained with designated depositary banks (DDBs). DPRs refer to electronic payment orders intended for payment to third party beneficiaries via HSBCSal, (i.e. international trade financed by HSBCSal, export remittances, workers remittances, foreign direct investment, etc.). The rating reflects the structural mitigants to several sovereign and bank risks associated with El Salvador and Banco HSBC Salvadoreno, allowing the rating of the securitization to reach 'BBB+'. The rating also reflects the strength of the bank's DPR flows and coverage levels and the legal structure of the transaction. Quarterly coverage levels for the program during 2010 averaged approximately 30 times (x) maximum quarterly debt service.
Fitch has affirmed the following ratings:
Salvadoreno DPR Funding Ltd.
--2004-1 A&R at 'BBB+'; Outlook Stable;
--2004-2 at 'BBB+'; Outlook Stable.
The assigned 'BBB+' rating is higher than El Salvador's long-term foreign and local currency Issuer Default Ratings (IDR) of 'BB', as the transaction mitigates certain sovereign risks associated with El Salvador. All DDBs have signed Notice, Consent and Agreements that obligate them to deposit DPR collections into a designated collection account controlled by the indenture trustee, and large coverage levels ensure that the incentive for government interference remains low. On average, over 97% of all collections currently come via DDB transactions.
HSBCSal is currently the fourth largest bank in El Salvador with 14.4% of the banking system's loans and deposits as of year-end 2009. Fitch currently rates HSBCSal's IDR 'BBB-' with a Negative Outlook.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--'Future Flow Securitization Rating Criteria' (March. 3, 2010);
--'Global Structured Finance Rating Criteria' (Aug. 13, 2010);
--'El Salvador' (Jul. 13, 2010);
--'Banco HSBC Salvadoreno' (May 17, 2010).
Applicable Criteria and Related Research:
Banco HSBC Salvadoreno
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=524925
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547326
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.