Based on the Sept 15, 2008 downgrade of Lehman Brothers Holdings Inc. (LBHI) long- short-term Issuer Default Ratings (IDRs) to 'D', Fitch Ratings has downgraded the short-term rating on 253 tender option bonds (TOBs) with liquidity by LBHI to 'D'.
Some of the TOBs also have credit enhancement provided by LBHI, which provided the basis for Fitch's long-term rating on the TOBs. For the TOBs with credit enhancement by LBHI where Fitch also maintains long-term ratings on the securities within the TOB trusts, the long-term ratings on the TOBs are revised to the long-term ratings of the securities within the trusts. For the TOBs with credit enhancement by LBHI where Fitch does not maintain long-term ratings on the securities within the trusts, the long-term ratings on the TOBs are withdrawn.
For the TOBs that do not have credit enhancement provided by LBHI, the long-term ratings remain the same.
Note that on June 9, Fitch downgraded the IDRs of LBHI to 'A+' and 'F1'. By error, these downgrades were not passed through to the ratings of the TOBs rated by Fitch prior to June 9. Therefore, today's downgrades of those TOBs are from a short-term rating of 'F1+', and, if they had credit enhancement from LBHI, a long-term rating of 'AA-'. For the TOBs rated after June 9, the downgrades are from a short-term rating of 'F1' and, if they had credit enhancement from LBHI, a long-term rating of 'A+'.
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.