CHICAGO--()--Fitch Ratings has assigned the following rating to the new issuance of notes by General DPR Funding Ltd. (General DPR):
--USD100 million Series 2012-A notes due 2019 rated 'A' with a Stable Outlook.
General DPR is a securitization of future and existing U.S. dollar-denominated diversified payment rights (DPRs) originated by Panama-based Banco General S.A. (Banco General; long term (LT) foreign currency Issuer Default Rating (IDR) of 'BBB+'; Outlook Stable). DPRs are electronic payment orders intended for payment to third party beneficiaries, and in this case, mostly relate to Colon Free Trade Zone (CFTZ) flows associated to importation and re-exportation of goods; capital flows; financial services; commerce and foreign direct investment.
The assigned rating reflects (i) Fitch's assessment of Banco General's Going Concern Assessment Score of GC1, which among other factors, is a reflection of the bank's prominent position within the Panamanian banking system; (ii) the strength and diversity of the bank's DPR flows; (iii) the relatively high expected quarterly debt service coverage ratios (DSCR) and the relatively small representation of DPR related debt to overall funding, (iv) the credit quality of Panama, which carries a LT IDR of 'BBB'/; Outlook Stable ; and (v) the transaction structure, which adequately mitigates potential sovereign and/or seller flow redirection risks. To a lesser extent, the ratings also reflect the transaction's exposure to Citibank N.A. (LT IDR 'A'; Outlook Stable), as the largest processor of DPRs for Banco General.
Fitch's rating addresses the likelihood of timely payment of principal and interest on a quarterly basis. The above mentioned characteristics allow the transaction to benefit from a two-notch uplift from Banco General's IDR of 'BBB+'.
Banco General is Panama's largest locally owned bank, maintaining a market share of 13% by total assets. The bank's DPR flows reached $1.7 million during the first half of 2012 and $3.8 billion in 2011, steadily increasing back to pre-crises levels. Flows are relatively diversified, with the top 20 beneficiaries representing 30% of total DPRs as of June 2012.
The transaction structure benefits from account agreements signed with designated depositary banks (DDBs), Wells Fargo Bank, N.A. (LT IDR of 'AA-'; Outlook Stable) and Citibank N.A., which irrevocably instruct them to deposit DPR flows into offshore accounts controlled by the Bank of New York Mellon, as trustee to the transaction. The percentage of DPR flows processed by these two banks (DDB flows) has averaged 92.4% of total DPRs since 2009.
Based on average DDB flows for the past three years, the USD100 million issuance which includes an interest only period of two years and quarterly amortizations until November 2019 is expected to yield average quarterly DSCRs of approximately 135x . In addition, the issuance represents only 1.16% of Banco General's total liabilities and 6.84% when excluding deposits.
For a more detailed analysis of this transaction, see Fitch new issue report titled 'General DPR Funding Ltd. Series 2012-A', which is available on 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Future Flow Securitization Rating Criteria' (June 19, 2012);
--'Global Structured Finance Rating Criteria' (June 06, 2012);
--'Panama' (June 1, 2012);
--'Banco General S.A.' (Jan. 9, 2012).
Applicable Criteria and Related Research: General DPR Funding, Ltd.
Global Structured Finance Rating Criteria
Future Flow Securitization Rating Criteria