Fitch affirms Turkish structured finance future flow transactions
Fitch Ratings has affirmed the ratings on a series of Turkish structured transactions. The agency removed the transactions from Rating Watch Negative, where they were placed on March 25. The Watch placement was due to the potential implications of Fitch's recent downgrade of Turkey's sovereign rating for the abilities of the originator banks to remain going concerns.
The transactions include Akbank Receivables Trust with BBB, Akbank Remittances Trust Securitization ARTS with BBB, Finansbank Trade and Diversified Payment Master Trust with BBB-, Garanti Receivables Trust with BBB, Garanti Trade Payments Rights Master Trust with BBB, Kocbank Diversified Payment Rights Securitization with BBB, Vakifbank Trade & Diversified Payment Rights Securitiztion with BBB and Yapi ve Kredi Securitization Company with BBB-.
The concern assessment would not automatically change because of a local currency rating upgrade or downgrade of the sovereign, but would be affected where there is a change in the prospects of a bank's ability to stay in operation. Therefore, Fitch focused on the ability of each bank to continue in existence even after default, typically via support from the state but also from stake holders.
The Turkish sovereign has shown a commitment to supporting banks in the past; some 20 banks have been taken over since 1997. Two of those banks were Iktisat Bankasi and Pamukbank, which had Fitch-rated structured finance transactions that went on to pay down effectively.
The originator banks in question have survived a previous period when the Turkish local currency rating dropped to B- between August 2001 to February 2002. Accordingly, Fitch believes that the ability of the banks to continue in existence has not materially changed.
Fitch has also increased the frequency of transaction reporting to weekly from monthly in most cases. The purpose of this is to more efficiently assess the impact, if any, of the war in Iraq on the transaction flows. Fitch will continue to closely monitor the performance and current enhancement levels. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
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