Moody’s Investors Service yesterday downgraded the class A notes of RHG’s Series UniCredit issue from Aaa to Aa1. The ratings agency cited the Supreme Court of NSW case over a claim by the security trustee that there had been an event of default.
RHG issued the Series UniCredit notes to a European bank HVB in January 2008 as part of a $750 million funding deal. The deal got into dispute last year when HVB and its security trustee, BNY, notified RHG of an event of default resulting from arrears rates going above a prescribed level.
Moody’s said: “In the event that the alleged event of default has occurred and a receiver will be appointed to the trust, there may be uncertainty about maintenance of the ongoing servicing quality of the mortgage portfolio.
“As well, the mortgage portfolio and hence the notes will be exposed to market value risk should the receiver decide to sell the portfolio.”
Moody’s said the class A notes remained under review for possible further downgrade and the class B notes, currently rated A1, were also under review.
- Moody’s downgrades RHG mortgage securities
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16 December 2009 6:55am
