-- Drug Royalty II LP 1's issuance is a securitization backed by royalty
revenue from 18 royalty streams on 11 patent-protected drugs and technologies.
-- We assigned our 'BBB (sf)' ratings to both the class A-1 and A-2 notes.
-- The 'BBB (sf)' ratings reflect our view of the transaction's timely
interest and ultimate principal payments, the expected value of the
collateral's cash flow, legal and payment structures, and DRI Capital Inc.'s
servicing ability, among other factors.
Dec 7 - Standard & Poor's Ratings Services today assigned its ratings to
Drug Royalty II LP 1's $220 million fixed- and floating-rate senior secured
notes series 2012-1 due Jan. 15, 2025 (see list).
The note issuance is a securitization backed by royalty revenue from 18
royalty streams on 11 patent-protected drugs and technologies.
The ratings reflect our view of:
-- The likelihood that timely interest and ultimate principal payments
will be made on or before the legal final maturity date.
-- The drug marketers' and distributors' estimated credit quality.
-- The expected value of the collateral's cash flow, which consists of
royalty payments from U.S. Food and Drug Administration-approved drugs or
-- The transaction's legal and payment structures.
-- DRI Capital Inc.'s servicing ability.
-- The interest-rate cap with Wells Fargo Bank N.A. and the currency
hedges with Morgan Stanley Capital Services and Wells Fargo Bank.
-- The liquidity reserve account, which will have a target balance of the
minimum of six months' interest payments or $1 million.
-- The overcollateralization, which provides credit support to the notes.
RELATED CRITERIA AND RESEARCH
-- Principles Of Credit Ratings, Feb. 16, 2011
-- U.S. Corporate Securitization Transactions, Oct. 24, 2006
-- Presale: Drug Royalty II LP 1 - Series 2012-1, Nov. 28, 2012
-- Global Structured Finance Scenario And Sensitivity Analysis: The
Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011
-- CIR (Cox-Ingersoll-Ross) Interest Rate Model, Nov. 3, 2010
-- Modeling Unhedged Foreign Exchange Risk In Structured Ratings, Nov.
Drug Royalty II LP 1 - Series 2012-1
Class Rating Amount
A-1 BBB (sf) 88.0
A-2 BBB (sf) 132.0