TEXT-Fitch assigns FADE's series 3 tap 'BBB(EXP)' expected rating

Wed Feb 13, 2013 6:25am EST

(The following statement was released by the rating agency)

Feb 13 - Fitch Ratings has assigned Fondo de Titulizacion del Deficit del Sistema Electrico F.T.A.'s (FADE or the issuer) Series 3 tap issuance an expected rating of 'BBB(EXP)' with Negative Outlook. The bonds to be issued are worth EUR154m.

All FADE series are fully guaranteed by the Spanish government up to a maximum of EUR22.0bn and hence the ratings are credit-linked to Spain's Long-term Issuer Default Rating (IDR) of 'BBB' such that any change in the sovereign IDR is likely to lead to a change in the bonds' rating. As the terms of the guarantee remain unaltered, the issuance has no rating impact on the outstanding series 1, 2, 3, 4, 5, 10, 13 and 14 FADE bonds.

The Series 3 tap maturity date is 17 March 2021 with a 5.90% fixed rate coupon paid yearly.

FADE bonds are backed by the outstanding electricity tariff deficit credit rights in Spain that have not yet been securitised through other securitisation platforms, and is able to issue different series of bonds up to the current programme limit of EUR22bn subject to certain conditions in the programme documents. Each series can have different terms, such as different maturity dates and interest rates. However, it is a condition under the programme documentation that all the bonds issued are fully guaranteed by the Spanish government.

FADE has a total EUR16.75bn of bonds outstanding to date. This will increase to EUR16.90bn after the series 3 tap issuance, which is expected to take place on 18 February 2013.

The agency understands that the tap issuance on Series 3 is intended to be used for the acquisition of new tariff deficit claims.

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