Press Releases

Fitch Affirms Malibu Loan Fund, Ltd. Feb 10, 2012 12:46PM

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the $110,800,000 of notes issued by Malibu Loan Fund, Ltd. (Malibu) at 'CCCsf'.

The affirmation reflects Fitch's analysis of both the market value (MV) and the credit risk of the portfolio. Given the exposure to both risks, the tranches are generally rated to the lower of the two indicative levels.

The notes' rating was primarily determined by comparing the credit risk of the portfolio to the current credit enhancement available to the notes. The credit risk of the portfolio was analyzed using the Portfolio Credit Model (PCM), as described in Fitch's Corporate CDO criteria. PCM projects the portfolio's loss rates (due to default and recovery) that may be experienced under various rating stresses. The credit enhancement of the notes, which measures the amount of realized losses that can occur before the notes are undercollateralized, was then compared to PCM's loss rates. Based on Fitch's PCM analysis, the credit enhancement to the notes of approximately 2.5% falls below the portfolio's 'CCCsf' rating loss rate. Due to the presence of excess spread in the transaction and the manager's ability to infuse cash into the transaction, however, Fitch views the credit risk to be consistent with a 'CCCsf' rating.

The MV risk was analyzed by comparing the distance-to-trigger (DTT) metric of 10.6% to advance rate (AR) ranges. As of the trustee report dated Jan. 31, 2012, the net collateral value (NCV) of the eligible collateral account was reported to be approximately $112.3 million. The NCV is equal to the sum of the MV of the eligible collateral and the unrealized MV gains or losses of the reference portfolio. The DTT metric indicates the price decline stress that would occur before triggering a termination event, which occurs when the NCV falls below $47.25 million (the termination threshold). The trigger is structured 'inside the tranche', such that the transaction may unwind with a substantial loss to the rated notes if breached.

The AR ranges are based on Fitch's analysis of the market dislocation experienced in 2007-2008, which represent a peak-to-trough decline. The worst case peak-to-trough price decline observed in loans during that timeframe was approximately 15%, which Fitch viewed as a 'BB' stress. Fitch's analysis of the MV risk begins with a categorization of portfolio loan assets based on the seniority level of the loan and/or their market price, which is then used to determine the AR thresholds under various rating stresses. A senior secured first lien loan priced above 85% of par would be classified as Category 2, and the AR applied to a Category 2 asset under a 'BB' stress would be 85%. A covenant-light loan or a loan that is priced between 70% and 85% of par would be classified as Category 3, in which an AR of 73% would apply in a 'BB' stress. A loan that is priced below 70% of par would be classified as Category 4, and an AR of 51% would apply in a 'BB' stress. Fitch also assumed that price declines under a 'B' stress would be approximately half of the observed 'BB' stress, implying that the price decline for a Category 2 asset would be approximately 8%. Therefore, the ARs for Category 2, 3, and 4 assets would be 92%, 85% and 75%, respectively, under a 'B' stress. This analysis is further supplemented in Fitch's May 2008 commentary, 'Fitch Update: Application of Revised Market Value Structure Criteria to TRR CLOs'.

Based on Fitch's classification of the portfolio assets, Malibu's portfolio is composed of the following:

--78.5% Category 2 assets;

--18.2% Category 3 assets;

--3.3% Category 4 assets.

The weighted average AR of the current portfolio (as of the Jan. 31, 2012 trustee report) is approximately 90.2% under a 'B' stress, which corresponds to a MV decline of 9.8%. Based on Fitch's classification of the assets, the DTT of 10.6% falls within Fitch's 'B' stress for the structure. In addition, sensitivity to MV risk still remains high, as the amount of long-dated assets increased significantly to 22.5% from 3.9% in the last review. The increased exposure to long-dated assets implies potential MV risk upon the maturity of the program.

The manager has made multiple infusions of cash collateral to increase Malibu's cushion to its distribution threshold - a mechanism that traps excess spread generated from the reference portfolio to invest in additional collateral. The manager had injected amounts up to approximately $165.2 million in cash in multiple occasions to avoid breach of the distribution threshold during the credit crisis.

Malibu Loan Fund, LLC is a synthetic total rate of return collateralized loan obligation (CLO) with a MV termination trigger. The transaction closed on Sept. 30, 2005 and is managed by Aegon USA Investment Management. The notes began to experience negative net asset value coverage in 2008, but subsequently benefited from cash infusions which were designed to increase the distance to the distribution and termination thresholds. The transaction remains in its reinvestment period until November 2014.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria & Related Research:

--'Rating Market Value Structures' (Aug. 16, 2011);

--'Global Structured Finance Rating Criteria' (Aug. 4, 2011);

--'Global Rating Criteria for Corporate CDOs' (Aug. 10, 2011);

--'Fitch Update: Application of Revised Market Value Structure Criteria to TRR CLOs' (May 15, 2008).

Applicable Criteria and Related Research:

Rating Market Value Structures

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648513

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569

Global Rating Criteria for Corporate CDOs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=641789

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.

Fitch RatingsPrimary Surveillance AnalystChristine ChooDirector+1-212-908-0603Fitch, Inc.One State Street PlazaNew York, NY 10004orCommittee ChairpersonDerek MillerSenior Director+1-312-368-2076orMedia Relations:Sandro Scenga, +1-212-908-0278 (New York)sandro.scenga@fitchratings.com

Source: Fitch Ratings

Fitch Rates Alabama Public School and College Authority Refunding Bonds 'AA+' Feb 10, 2012 12:46PM

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings assigns an 'AA+' rating to the following bonds of the Alabama Public School and College Authority (the authority):

--$94.14 million pool refunding bonds, series 2012-A;

--$98.745 million capital improvement, economic development and training refunding bonds, series 2012-B.

The bonds are expected to sell via competitive bid on or about Feb. 29, 2012. Fitch also affirms the 'AA+' rating on $1.3 billion outstanding capital improvement pool and qualified school bonds.

The Rating Outlook is Stable.

SECURITY

Limited obligation payable from pledged revenues, each bond series is subordinate to prior issues; once issued, the 2012 A & B bonds will occupy the 11th lien position respecting the pledged revenues.

KEY RATING DRIVERS

PRIMARY STATE FUNCTION: Although not a general obligation (GO) pledge, pledged revenues include major state revenue sources, including the sales tax, and finance a major state responsibility - K-12 and higher education. As such, the bonds are rated on par with the state's GO bonds. Financing of education is a centralized at the state level.

STRONG DEBT SERVICE COVERAGE: Pledged revenues provide ample coverage of debt service requirements both on an annual and max annual basis.

SPENDING CONTROLS: Balanced financial operations reflect the statutory requirement to balance the budget with across-the-board appropriation reductions if revenues fall short; debt service is excluded.

SLOW GROWTH IN ECONOMY: The trend in Alabama's economy is toward more diversification, although it retains a sizeable manufacturing base. There is an ongoing positive shift from low paying textile and apparel jobs to higher paying durable subsectors including automobile and aerospace manufacturing.

CREDIT PROFILE

The rating reflects ample coverage of debt service by pledged revenues, the strength of the pledged revenues, which include major state revenue sources, the core nature of the activities being financed (K-12 and higher education) and the strong budget controls exhibited by the state and its overall strong credit quality.

The authority provides capital financing for public education in Alabama, and, with $2.5 billion of debt outstanding, is the most active debt issuer of the several authorities that issue debt in the state. The authority members are the governor, the state superintendent of education, and the director of finance, which indicates the importance of this financing mechanism and the role of the state in education.

The bonds are a limited obligation of the authority payable from pledged revenues, which include statewide sales, use, lease, utility gross receipts and utility service use taxes. Pledged revenues not needed for debt service are deposited into the state Treasury to the credit of the Education Trust Fund (ETF), a special fund of the state that is the largest operating fund into which taxes and revenues are deposited. The ETF funds K-12 and higher education as well as smaller education, health, library and other programs. Each bond series has its own separate lien on pledged revenues subordinate to prior issues; once issued, the 2012 A & B bonds will occupy an 11th lien position respecting the pledged revenues. Given the ample coverage of debt service by pledged revenues, discussed further below, the subordinate status is not a rating factor.

While the authority bonds are not general obligations of the state, the rating does reflect the state's general credit quality as pledged revenues include major state revenue sources and finance a central state responsibility. Alabama has extensive earmarking of taxes and uses special obligations for nearly all of its capital needs. The general fund is minor in state operations as is debt issued against it. The state GO bonds are rated 'AA+' by Fitch based on the state's longer-term trend toward a more diversified economy despite a severe downturn in manufacturing, strong spending controls which contribute to balanced operations, and manageable debt levels.

Pledged revenues provide ample coverage of debt service requirements both on an annual and maximum annual basis. Unaudited fiscal year 2011 revenues of $2.2 billion, provide 8.2 times (x) coverage of maximum annual debt service, reflecting lower debt service following the refunding by the bonds being issued. Revenue growth was relatively flat year-over-year at 0.3% in fiscal 2011, after a strong 5.2% rebound in fiscal 2010. Revenues declined 11.2% in fiscal 2009 due to the recession, although coverage remained strong.

State financial operations, including the ETF, benefit from strong spending controls, with a constitutional requirement to make across-the-board appropriation reductions, called 'proration,' when a deficit is projected in one of several funds. Debt service is not subject to proration. This device has been implemented several times, including in fiscal year 2009, when weak revenue performance necessitated a 17.9% reduction in education appropriations, in fiscal year 2010, when a 9.5% proration was declared and then again in fiscal year 2011 with a 3% proration. By depleting its education rainy day fund, the state was able to limit the fiscal 2009 reduction to 11%.

In an attempt to minimize the unpredictability of mid-year reductions in education funding, in 2011, the state enacted legislation to create a new budget stabilization fund for education that will be used to offset future proration. The legislation limits future education appropriations to the 15-year rolling average of ETF revenues and deposits any excess revenues into a new ETF budget stabilization fund, after first repaying the fiscal 2009 draw on the rainy day fund.

The series 2012-A & B bonds are being issued to refund outstanding bonds for debt service savings. The authority issues bonds to provide loans to local school boards for capital projects under a pooled approach that allows capital funds of the state to be leveraged rather than being limited to support pay as you go financing. The authority also issues capital outlay bonds for capital improvements to public schools and institutions of higher education with proceeds considered grants to recipients. Overall debt levels in the state are low end of the moderate range, with tax supported debt equal to 2.2% of 2010 personal income.

Alabama's economy was historically dominated by agriculture, natural resource extraction, and manufacturing, including textiles and iron and steel production. Today, the state still depends more heavily on manufacturing relative to the national average, but manufacturing has shifted away from textiles and apparel, particularly to the automotive sector. This sector was hard hit in the current recession, but the foreign-owned automakers in the state, including Honda, Hyundai, and Daimler AG, continue to invest and produce in Alabama. Further, auto supplier activity is expected to grow as assembly plants open near the Georgia border.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

In addition to the sources of information identified in Fitch's report 'Tax-Supported Rating Criteria', this action was additionally informed by information from IHS Global Insight.

Applicable Criteria and Related Research:

--'Tax-Supported Rating Criteria', dated Aug. 15, 2011;

--'U.S. State Government Tax-Supported Rating Criteria', dated Aug. 15, 2011.

Applicable Criteria and Related Research:

Tax-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648898

U.S. State Government Tax-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648897

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.

Fitch RatingsPrimary AnalystKaren KropSenior Director+1-212-908-0661Fitch, Inc.One State Street PlazaNew York, NY 10004orSecondary AnalystKen WeinsteinSenior Director+1-212-908-0571orCommittee ChairpersonLaura PorterManaging Director+1-212-908-0575orMedia RelationsSandro Scenga+1-212-908-0278sandro.scenga@fitchratings.com

Source: Fitch Ratings

Marriott International Declares Cash Dividend; Board Increases Stock Repurchase Authorization Feb 10, 2012 12:45PM

Americans United for Life says Obama Administration's Strained Health Care Policy Pronouncement "Turns Roe on its Head" Feb 10, 2012 12:44PM

IIROC: Halt, CardioComm Solutions Inc. Feb 10, 2012 12:43PM

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 10, 2012) - The following issues have been halted by IIROC / L'OCRCVM a suspendu la negociation des titres suivants :

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Company / Societe :                CardioComm Solutions Inc.
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TSX-Venture Symbol / Symbole a la
 Bourse de croissance TSX :        EKG
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Reason / Motif :                   At the Request of the Company Pending
                                   News / A la demande de la societe en
                                   attendant une nouvelle
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Halt Time (ET) / Heure de la
 suspension (HE)                   12:38
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Please note that IIROC is not able to provide any additional information regarding a specific trading halt or resume. Information is limited to general enquiries only.

FOR FURTHER INFORMATION PLEASE CONTACT:
        IIROC Inquiries
        (416) 646-7299
        Fax: (604) 602-6986(FAX)
        Surveillancewest@iiroc.ca
        www.iiroc.ca

Source: Investment Industry Regulatory Organization of Canada