-- We assigned our short-term 'A-1 (sf)' ratings to the U.S. puttable and
U.S. callable/puttable ABCP notes issued by Barton Capital LLC.
-- Each of these notes will be offered on a continuous basis.
-- The ratings reflect amendments to Barton's program documents to permit
the issuance of these additional types of short-term liabilities.
Nov 30 - Standard & Poor's Ratings Services today assigned its short-term
'A-1 (sf)' ratings to two new short-term U.S. dollar-denominated liabilities
issued by Barton Capital LLC (Barton) (see list). The new short-term liabilities
are puttable asset-backed commercial paper (ABCP) notes and puttable/callable
Barton is an ABCP conduit administered and managed by Societe Generale (Soc
Gen). Soc Gen, in its capacity as the program administrator, amended Barton's
program documents to permit the issuance of these types of short-term
liabilities in addition to the conduit's currently outstanding standard ABCP
notes and callable ABCP notes. The amendments will, among other things, permit
Barton to issue floating-rate interest-bearing notes for four of the ABCP
liability types (including the existing U.S. standard ABCP and callable ABCP).
The puttable ABCP notes will give the noteholder the right to be repaid on its
put date (a specified date before the scheduled maturity date). The put
provisions for each puttable ABCP note, including put dates and put notice
requirements, will be set forth in a pricing supplement document that the
issuer or placement agent will deliver when the related note is issued.
The terms of the transaction confirmation require that, upon the noteholder's
election to put a note and its delivery of notice pursuant to the put notice
provisions, the issuer is obligated to pay principal and interest or discount,
as applicable, accrued up to the put date only, regardless of when the note is
presented for payment.
The noteholder must deliver the put notice at least 35 days before the put
Upon the noteholder's election to exercise its put option on the put date and
its delivery of notice pursuant to the put notice provisions, the terms of the
pricing supplement, together with the private placement memorandum, require
the noteholder to present, or cause its recordholder to present, its related
notes to the issuing and paying agent through the Depository Trust & Clearing
Corp. (DTCC) in order to receive payment on the note on such put date.
If the noteholder does not elect to exercise its put option, the note is
required to be repaid on its scheduled maturity date in an amount equal to
principal and interest or discount, as applicable, accrued up to the scheduled
The 'A-1 (sf)' rating on the puttable ABCP notes reflect our view of Barton's
structure and the underlying asset quality, as well as our ratings on the
counterparties that provide financial support to the notes. The rating
addresses our view of the likelihood that principal and accrued interest or
discount, as applicable, accrued up to the put date will be repaid if the
noteholder exercises its put option. The rating also addresses our view of the
likelihood that principal and accrued interest or discount, as applicable,
accrued up to the scheduled maturity date will be repaid if the noteholder
does not exercise its put option.
The puttable/callable ABCP notes will give the issuer and the noteholder the
same rights as described above for the puttable ABCP and the same provisions
as the callable ABCP notes that we rated last year. If a issuer exercises a
call option after the noteholders exercised the put option, the put option
will be disregarded and the notes will be redeemed on the call date in
accordance with the terms of the call option.
The 'A-1 (sf)' rating on the puttable/callable ABCP notes reflects our view of
the Barton's structure and the underlying asset quality, as well as our
ratings on the counterparties that provide financial support to the notes. The
rating addresses our view of the likelihood that principal and accrued
interest or discount, as applicable, accrued up to the call or put date, will
be repaid if the issuer exercises its call option or if the noteholder
exercises its put option, respectively. The rating also addresses our view of
the likelihood that principal and accrued interest or discount, as applicable,
accrued up to the scheduled maturity date, will be repaid if neither the
issuer nor the noteholder exercises their call or put options, respectively.
Prior to the current amendments to the program documents, Barton was limited
to issuing discount and interest bearing ABCP notes on a fixed-rate basis. The
amended program documents permit Barton to issue interest-bearing ABCP
(standard, callable, puttable, and puttable/callable notes) at either fixed or
floating interest rates. Barton will issue all floating-rate interest-bearing
notes on the LIBOR index--with daily, weekly, monthly, or quarterly
resets--and spread amounts determined when each note is issued, as specified
in the pricing supplement documents.
The amended program documents require, prior to the issuance of any new
short-term notes (including standard ,callable, puttable, and
puttable/callable ABCP notes), that the aggregate principal and interest or
discount, as applicable, due on all outstanding short-term notes for each
issuer be less than or equal to the amount of aggregate liquidity commitments
available. The interest rate risk present for floating-rate ABCP notes (that
is, the risk that LIBOR rates may increase during the tenor of any
floating-rate notes such that the aggregate principal and interest amounts due
on the outstanding ABCP could exceed the amounts available under the liquidity
facilities) is mitigated by an indemnity from Soc Gen to Barton. One of Soc
Gen's duties as Servicing Agent is to determine the amount of all interest
accrued and expected to accrued thereon prior to the maturity of commercial
paper note. In the case there is a potential shortfall to pay accrued interest
when due, Soc Gen would indemnify Barton of the shortfall.
RELATED CRITERIA AND RESEARCH
-- Global Asset-Backed Commercial Paper Criteria, Sept. 29, 2005
-- Legal Criteria for U.S. Structured Finance Transactions: Overview of
Legal Criteria for U.S. Structured Finance Transactions, Oct. 1, 2006,
specifically, but not limited to, Chapter Seven: Criteria Related to
Commercial Paper Conduits.
-- Methodology: Credit Stability Criteria, May 3, 2010
-- Principles Of Credit Ratings, Feb. 16, 2011
-- Counterparty Risk Framework Methodology and Assumptions, May 31, 2012
-- General Criteria: Global Investment Criteria For Temporary Investments
In Transaction Accounts, May 31, 2012
-- Standard & Poor's Analysis of ABCP Ratings Following Changes to
Ratings on Support Providers, Dec. 18, 2008
-- Asset-Backed Commercial Paper Issued By Multiseller Conduits:
Classification and Timing of Reviews for New-Seller Transactions, April 18,
-- Global Structured Finance Scenario and Sensitivity Analysis: The
Effects of the Top Five Macroeconomic Factors, Nov. 4, 2011
-- Banks: Rating Methodology and Assumptions, Nov. 9, 2011
-- Assessing Credit Quality By The Weakest Link, Feb. 13, 2012
-- Standard & Poor's Clarifies Its Approach to Requests for Rating Agency
Confirmations on Global Structured Finance Transactions, May 18, 2012
Barton Capital LLC
U.S. puttable ABCP notes A-1 (sf)
U.S. puttable/callable ABCP notes A-1 (sf)