Fitch Ratings has assigned an 'A+' rating to the $4,500,000 in equity-linked notes series 2008-F issued by Puerto Rico Fixed Income Fund V, Inc. (the Fund), which closed on August 29.
The rating is based on asset coverage and basic maintenance amount tests for the Fund, and the experience and capabilities of the asset manager, UBS Asset Managers of Puerto Rico.
The rating addresses the likelihood of the Fund redeeming the outstanding notes at their principal amount on their maturity date and the ability of the fund to make the required interest payment on the notes at maturity. The interest payment is based on the change in value of the S&P 500(R) Index, in accordance with the transaction documents. The Fund has entered into an interest rate swap in order to hedge against exposure to changes in the value of the Index. The rating assigned by Fitch is linked and may change with the rating of the swap counterparty.
The Fund's pro-forma coverage ratios calculated in accordance with the Fitch Basic Maintenance Amount Test satisfied a minimum coverage ratio of at least 100%. Additionally, the Fund's pro-forma debt coverage ratios, calculated in accordance with the Fund's offering circular, satisfied leverage requirements of an asset coverage ratio of at least 200%.
The Fund is a closed-end management investment company that invests primarily in Puerto Rico and U.S. municipal, government, and mortgage-backed securities. The Fund's objective is to provide current income that is exempt from U.S. federal and Puerto Rico income taxes, consistent with the preservation of capital. The Fund will normally invest at least 67% of its total assets in Puerto Rican obligations. Additionally, at least 80% of total assets will be invested in investment-grade securities.
UBS Asset Managers of Puerto Rico is the investment adviser for the fund, and is a division of UBS Trust Company of Puerto Rico. UBS Trust Company of Puerto Rico is the calculation and collateral agent, and an affiliate of UBS AG and UBS Financial Services Incorporated of Puerto Rico, the Fund's dealer.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.