Fitch Affirms Seven and Seven Ltd; Outlook Stable

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed Seven and Seven Ltd. as follows:

--$112,725,000 floating rate guaranteed notes due 2019 at 'AA-sf'; Outlook Stable.

The note proceeds were used to fund a portion of a loan made to a group of 18 borrowers under a loan agreement with Scorpio Tankers, Inc., as guarantor of the loan, the issuer, the Export-Import Bank of Korea (KEXIM; Issuer Default Rating [IDR] 'AA-'/Outlook Stable/'F1+'), and certain other financial institutions. The loan was used to fund a portion of the purchase price of 18 shipping vessels. The borrowers will make regular payments under the loan agreement according to a predefined schedule. The loan payments will in part be used to meet the scheduled interest and principal due under the notes.

The notes will receive 10 installments of interest and principal in equal amounts over five years. Note holders will also receive make-whole or prepayment premium payments in case of an early redemption, as further described in the presale report. The rating addresses the likelihood of all contractual payments being received as per the terms of the transaction.

The indenture trustee, Wells Fargo Bank, NA (IDR 'AA'/Outlook Stable/'F1+') and KEXIM entered into a guarantee agreement at closing, whereby KEXIM guaranteed, in favor of the indenture trustee, principal, accrued and unpaid interest due on the due date plus interest to accrue from the due date up to the date of its actual payment, and any make whole amount or prepayment premium as applicable. The make whole amount or prepayment premium will be paid if KEXIM opts to accelerate its payment of the outstanding principal amount of the notes.

KEY RATING DRIVERS

The rating on the notes is credit-linked to KEXIM's long-term IDR as guarantor. Fitch has not formed a credit opinion on the underlying borrowers or primary guarantor.

The terms of the KEXIM guarantee allow for up to a 14 day delay in payment. As described in Fitch's Criteria for Rating Caps and Limitations in Global Structured Finance Transactions, Fitch generally will not assign a high investment grade rating to notes that exhibit significant vulnerability to interest deferrals. However, Fitch believes that, in this case, the terms of the guarantee leave the noteholders in a substantially similar economic position as if a delay had not occurred and does not deem the potential maximum deferral period of 14 business days as excessive. Interest on the notes will accrue during the delay period.

Wells Fargo Bank, N.A. ('AA'/Outlook Stable/'F1+'), as trustee, is responsible for maintaining the payment account, distributing payments on each payment date, and creating the monthly remittance report, among other duties. Fitch considers the trustee to be a direct support counterparty.

RATING SENSITIVITIES

A downgrade of KEXIM's long-term IDR would automatically result in the downgrade of the notes.

DUE DILIGENCE USAGE

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

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 28 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Global Rating Criteria for Single- and Multi-Name Credit-Linked Notes (pub. 09 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863276

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=988140

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=988140

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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 MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150717005762/en/

Fitch Ratings
Primary Analyst
Shashi Srikantan
Director
+1-212-908-0393
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Kevin Corrigan, Esq.
Senior Director
+1-212-908-0156
or
Media Relations
Sendhil Selvaraj, +44 (0) 207 682 7218
[email protected]

Source: Fitch Ratings

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