Link to Fitch Ratings' Report: Industrial DPR Funding Ltd Series 2011 (ABS US)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649773
Fitch Ratings expects to rate Industrial DPR Funding Ltd's notes as follows:
--Series 2011-1 'BBB(EXP)';
--Series 2011-2 'BBB(EXP)';
--Series 2011-3 'BBB(EXP)'.
The Rating Outlook is Positive.
The transaction is a securitization of U.S. dollar-denominated diversified payment rights (DPRs) originated by Banco Industrial S.A. (BI). Fitch's ratings address the likelihood of timely payment of interest and principal on a quarterly basis.
DPRs arise from a variety of sources, including export flows, capital flows, and family remittances. During 2010, BI processed approximately $6.12 billion in DPR flows, up from $2.96 billion in 2005, representing a 16% cumulative annual growth rate during this period. Approximately 95% of DPRs flow through four designated payment banks (DPBs), which have signed Acknowledgment Agreements, irrevocably obligating them to send remittances through the offshore accounts controlled by the Indenture Trustee.
The proposed transaction is BI's third issuance out of its DPR program, which was established in September 2005. Total debt outstanding on the program amounts to $258 million and will increase up to $358 million after closing.
Fitch views the bank's DPR business and performance risk consistent with a going concern assessment (GCA) score of GC1. Fitch's ratings on the notes primarily reflect BI's prominent position within Guatemala's banking system, the strength of the DPR flows, and the relatively high expected monthly debt service coverage ratios (approximately 63.0x). These characteristics allow for a three-notch uplift from the bank's LC IDR of 'BB', consistent with BI's GCA score.
BI is Guatemala's largest privately owned bank, with significant market shares across all business segments. As of the end of 1Q'11, BI had $6.7 billion in assets (27.8% of total system assets) and $5.1 billion in deposits (26.8% of total system deposits). For a more detailed analysis on BI, please refer to the full rating report available on Fitch's web site at 'www.fitchratings.com'.
For a more detailed description of Fitch's analysis on this transaction, see the published presale report titled 'Industrial DPR Funding Ltd. Series 2011-1, 2011-2 and 2011-3 Notes,' also available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'
Applicable Criteria and Related Research:
--'Future Flow Securitization Rating Criteria' (June 24, 2011);
--'Global Structured Finance Rating Criteria' (Aug. 4, 2011);
--'Guatemala' (Aug. 18, 2010);
--'Banco Industrial' (Nov. 30, 2010).
Applicable Criteria and Related Research:
Future Flow Securitization Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=634949
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646569
Guatemala
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=539226
Banco Industrial
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=581825
Banco Industrial
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=575107
Banco Industrial
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=582326
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