(The following statement was released by the rating agency)
LONDON, June 25 (Fitch) Fitch Ratings has affirmed two deposit
funds The CBF
Church of England Deposit Fund's and The COIF Charities Deposit
Credit and Fund Volatility Ratings at 'AAA'/'V1' respectively.
Both funds are
managed by CCLA Investment Management Limited (CCLA).
KEY RATING DRIVERS
The funds' credit ratings reflect the distribution of ratings,
quality, and the short-term maturity of the funds' portfolios.
The ratings also
recognise the investment advisor's capabilities and resources.
Ratings reflect the low sensitivity to market risk factors such
as interest rate
and spread risks.
ASSET CREDIT QUALITY
The credit quality of the funds' portfolio of assets, combined
with the short
maturity of assets, is consistent with a 'AAA' Bond Fund Credit
sizeable proportion of assets held are short-dated, with 34% of
maturing within one month for both funds (as of 13 June 2014.)
portfolios are concentrated in securities rated in the 'A'
According to the funds' investment policies, the maximum
investment in a minimum
'F1+'/ 'AA-' /Support Rating '1' rated entity is limited to 10%
assets, and the maximum investment in a minimum 'F1'/ 'A'
/Support Rating '4'
rated entity is capped at 5% of portfolio assets. There is an
exception for UK
banks, where a 10% limit is allowed if the entity meets minimum
/Support Rating '1' criteria. The maximum maturity of any
investment must not
exceed one year per the funds' investment policies.
As of 13 June 2014 the CBF Church of England Deposit Fund and
the COIF Charities
Deposit Fund invested in 21 and 22 obligors respectively. The
top five issuers
comprise 43% of the CBF Church of England Deposit Fund and 47%
of the COIF
Charities Deposit Fund, consistent with Fitch's rating criteria
for a 'AAA'
credit rating. Fitch considers a portfolio 'moderately
concentrated' if the top
five issuers exceed 50% of the total portfolio.
PORTFOLIO SENSITIVITY TO MARKET RISKS
The funds have low exposure to market risk factors such as
interest rate and
The weighted average maturity (WAM; as at 13 June 2014) for the
CBF Church of
England Deposit Fund and the COIF Charities Deposit Fund was 95
days and 96 days
respectively. The funds' WAMs are limited to 120 days as per
investment policies. Both funds invest solely in GBP instruments
fund is allowed to utilise leverage. Neither fund invests in
THE TRUSTEE AND ADVISOR
The Trustee for the CBF Church of England Deposit Fund is CBF
Limited (CBFFT), and the Trustee for the COIF Charities Deposit
Fund is the COIF
Board. Both the CBFFT and the COIF Board have delegated to CCLA
management and administrative responsibilities for the
CCLA is a UK-based fund management group offering a range of
fund products. CCLA
is jointly owned by CCLA Executive Directors (6.9%), The CBF
Church of England
Investment Fund (55.9%), The COIF Charities Investment Fund
(23.3%) and the
Local Authorities' Mutual Investment Trust (13.9%). An
risk, internal audit and compliance team maintains oversight of
operations. CBFFT and the COIF Board have appointed The Royal
Bank of Scotland
Plc to oversee CCLA in respect of its activities related to the
administration of the funds. At as 31 March 2014, CCLA managed
CCLA is changing their operating structure and are in the
process of appointing
a Depositary and Administrator of both funds. This change is
likely to be
completed by end-2014.
Both funds aim to pay competitive rates of interest to reflect
market rates. The assets of the funds will be invested in
eligible securities of
counterparties who are regularly reviewed and annually approved
by COIF's Board
members and CBFFT respectively.
The size of the CBF Church of England Deposit Fund was GBP645m
and the COIF
Charities Deposit Fund was GBP944m as of 13 June 2014.
The ratings may be sensitive to material changes in the credit
quality or market
risk profiles of the fund. A material adverse deviation from
for any key rating driver could cause the ratings to be
downgraded by Fitch. For
additional information about Fitch's bond fund ratings
guidelines, see the
criteria referenced below.
To maintain the bond fund ratings, CCLA, the administrator of
provides Fitch with weekly information, including details of the
holdings and credit quality.
Richard Woodrow, CFA
+ 44 203 530 1388
Fitch Ratings Limited
30 North Colonnade
London E14 5GN
+ 44 203 530 1147
+1 212 908 0528
Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153,
Additional information is available at www.fitchratings.com.
The sources of information used to assess this rating were the
public domain and
Applicable Criteria, "Global Bond Fund Rating Criteria", dated
13 August 2013 is
available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Bond Fund Rating Criteria
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS
here. IN ADDITION,
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PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS,
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE
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CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER
SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES.
DETAILS OF THIS
SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER
ON THE FITCH