Fitch Downgrades Three Classes of Taberna Preferred Funding IX, Ltd.

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has downgraded three classes of Taberna Preferred Funding IX, Ltd. (Taberna IX), as follows:

--$52,014,718 Class A-1LAD Notes to 'Dsf' from 'Csf';

--$116,330,701 Class A-1LB Notes to 'Dsf' from 'Csf';

--$25,232,862 Class A-2LA Notes to 'Dsf' from 'Csf'.

KEY RATING DRIVERS

The rating downgrades reflect the default in payment of interest to the Class A-1LAD, A-1LB, and A-2LA Notes.

Taberna IX entered an Event of Default on Nov. 10, 2015 due to a default in the payment of interest on the non-deferrable class A-1LB and A-2LA notes. The Event of Default triggered the acceleration of the transaction on Nov. 30, 2015. Due to the acceleration, the class A-1LB and class A-2LA notes will not receive principal or interest payments until the more senior classes are paid in full. Additionally, on the Feb. 5, 2016 payment date, the Class A-1LAD notes failed to receive timely interest distribution. Since the trustee is seeking direction and clarification regarding the payment to the Class A-1LAD notes, and until the situation is resolved, no distribution will be made to the Class A-1LAD notes.

There are multiple outstanding Hedge Agreements in Taberna IX that are out of the money and require a significant payment by the CDO to the Swap Counterparty each quarter.

The class A-1LA, A-2LB, A-3LA, A-3LB, B-1L, and B-2L notes were not included in this review. Fitch does not rate the preferred shares in this transaction.

Taberna IX is a trust preferred collateralized debt obligation (TruPS CDO), which closed on June 28, 2007. The portfolio is composed primarily of trust preferred securities issued by REITs and is managed by TP Management LLC, an affiliate of Fortress Investment Group LLC.

RATING SENSITIVITIES

Significant paydowns and expiration of interest rate hedges, combined with stable or improving credit migration, can lead to limited upgrades for senior notes.

DUE DILIGENCE USAGE

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

Additional information is available at www.fitchratings.com.

Sources of Information:

The information used to assess these ratings was sourced from trustee reports, collateral manager reporting Web sites and the public domain.

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

Global Rating Criteria for CLOs and Corporate CDOs (pub. 12 Nov 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873664

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Global Surveillance Criteria for Structured Finance CDOs (pub. 13 Jul 2015)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867800

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=999605

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=999605

Endorsement Policyhttps://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/20160217006610/en/

Fitch Ratings
Primary Analyst:
Azadeh Sharif, +1-212-908-0874
Associate Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson:
Alina Pak, CFA, +1-312-368-3184
Senior Director
or
Media Relations:
Hannah James, +1-646-582-4947
New York
[email protected]

Source: Fitch Ratings

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