Announcement out S&P Downgraded MTN to BBB- reproduced below
Melbourne, Oct. 3, 2008—Standard & Poor’s Ratings Services today announced that the ratings on the A$535 million medium-term notes (MTNs) issued by Allco Max Securities and Mortgage Trust (Allco Max) have been lowered to ‘BBB-’ from ‘A-’. The ratings remain on CreditWatch with negative implications, where they were initially placed on March 25, 2008 (see list). The most recent information made available by Allco Max has shown that the portfolio has experienced material yield compression over a relatively short period of time. In Standard & Poor’s opinion, the yield compression is likely to impact the transaction yield sufficiency test, leading to our view that three of the critical portfolio tests, including the capital adequacy test, the MTN liquidity test, and senior expense income ratio test, are now sensitive to a breach. Under the terms of the MTNs, Allco Max is required to actively balance the portfolio to manage any actual or potential breaches; however, if current market conditions continue, the options available to rebalance the portfolio are likely to diminish rapidly. Standard & Poor’s will review any further information on the basis for, and longer term impact of, the portfolio yield compression. The remaining uncertainty on the pricing outcome of the warehouse notes has resulted in the MTNs remaining on CreditWatch with negative implications. Name Ratings To Ratings From Allco Max Securities and Mortgage Trust MTNs 2005-1T BBB-/Watch Neg A-/Watch Neg Allco Max Securities and Mortgage Trust MTNs 2006-1T BBB-/Watch Neg A-/Watch Neg
AXQ Price at posting:
4.2¢ Sentiment: Hold Disclosure: Held
