CA UBS 2007
p. 4
Tobacco securitizations structured by UBS have been among the most leveraged transactions in the sector. This is mostly attributable to our strategic focus on rating agency stress criteria, that we began in 2002.
Tobacco securitizations structured by UBS have been among the most leveraged transactions in the sector. This is mostly attributable to our strategic focus on rating agency stress criteria, that we began in 2002.
UBS analyzed, re-engineered, and fundamentally changed the underpinning criteria for mainstream ratings when it first dropped Moody's in conjunction with Kern County's (California) transaction. After Moody's agreed to fine-tune its stress test for the Kern County transaction, UBS presented similar reasoning related to the State of Rhode Island TSR securitization. As a result, Moody's decided to permanently ease its stress tests.
UBS analyzed, re-engineered, and fundamentally changed the underpinning criteria for mainstream ratings when it first dropped Moody's in conjunction with Kern County's (California) transaction. After Moody's agreed to fine-tune its stress test for the Kern County transaction, UBS presented similar reasoning related to the State of Rhode Island TSR securitization. As a result, Moody's decided to permanently ease its stress tests.
p. 5
UBS shared its findings with Fitch within 24 hours of their press release. Fitch confirmed our analysis and worked with our tobacco securitization bankers to devise a new stress test methodology. The UBS tobacco team's analysis transformed the new criteria from a 1% net loss into a 7% net gain proposition.
UBS shared its findings with Fitch within 24 hours of their press release. Fitch confirmed our analysis and worked with our tobacco securitization bankers to devise a new stress test methodology. The UBS tobacco team's analysis transformed the new criteria from a 1% net loss into a 7% net gain proposition.
Pioneered Selective Rating Agency Strategy to Create Most Efficient, Leveraged California County Issues
Pioneered Selective Rating Agency Strategy to Create Most Efficient, Leveraged California County Issues
Prior to the Merced County transaction, Moody's had been excluded from all tobacco transactions since the 2005 Virginia TSR Securitization. Though others viewed Moody's as obsolete, UBS brought them back to the sector and worked with them to modernize their criteria.
Prior to the Merced County transaction, Moody's had been excluded from all tobacco transactions since the 2005 Virginia TSR Securitization. Though others viewed Moody's as obsolete, UBS brought them back to the sector and worked with them to modernize their criteria.
p. 7
In reality, we anticipate that the threat of not using Moody's on a transaction of this size and importance could provide the necessary leverage to enable Moody's analysts to get in-line with their competitors, so that the State would be able to use Moody's with little to no reduction in net proceeds.
In reality, we anticipate that the threat of not using Moody's on a transaction of this size and importance could provide the necessary leverage to enable Moody's analysts to get in-line with their competitors, so that the State would be able to use Moody's with little to no reduction in net proceeds.
p. 8
Again, if handled appropriately, it is our hope that discussions with Moody's could cause them to relax their stress tests, as was the case for the Rhode Island transaction, so that use of Moody's will have little or no negative impact upon the State's net proceeds from the transaction.
Again, if handled appropriately, it is our hope that discussions with Moody's could cause them to relax their stress tests, as was the case for the Rhode Island transaction, so that use of Moody's will have little or no negative impact upon the State's net proceeds from the transaction.
In 2002, UBS was the first firm to explore and implement the concept of "shopping" ratings and optimizing the net proceeds results among the three rating agencies, a practice now used consistently among the few firms versed in MSA securitizations . . . the rating agencies are each accustomed to this practice in the Structured Finance sector.
In 2002, UBS was the first firm to explore and implement the concept of "shopping" ratings and optimizing the net proceeds results among the three rating agencies, a practice now used consistently among the few firms versed in MSA securitizations . . . the rating agencies are each accustomed to this practice in the Structured Finance sector.