Rating Assigned To Elva Funding#s Series 2017-5 Repack Notes

Stocks and Financial Services Press Releases Thursday January 11, 2018 17:59
LONDON--11 Jan--S&P Global Ratings

LONDON (S&P Global Ratings) Jan. 11, 2018--S&P Global Ratings has assigned its 'A+' credit rating to Elva Funding PLC's series 2017-5 $200 million floating-rate notes due Dec. 20, 2021. Elva Funding is a segregated multiple-issuance special-purpose entity established in Ireland.

At closing, Elva Funding issued the series 2017-5 notes and used the proceeds to fund exposure to reference obligations (ROs).

For every RO purchased, the issuer will enter into a total return swap with Morgan Stanley & Co International PLC (MSIP) under a total return swap facility with MSIP. Under the total return swap, the issuer pays the total return on the ROs to MSIP. In exchange, MSIP will cover any credit risk the issuer is exposed to from the ROs, and receives (on preset scheduled dates) the amount of interest payable on the notes.

Elva Funding may add or remove the ROs on an ongoing basis, subject to certain conditions under the total return swap agreement.
MSIP paid the fees and expenses for this transaction at closing, as well as any other fees and expenses that might arise. It also pays any ongoing expenses of the issuer under an expense agreement.

We consider the key risk for the series 2017-5 notes to be the credit risk of MSIP as total return swap. Therefore, in accordance with our repack criteria, we have weak-linked our 'A+' rating on the series 2017-5 notes to our long-term issuer credit rating on MSIP (see "Global Methodology For Rating Repackaged Securities," published on Oct. 16, 2012). Under our repack criteria, if we were to take a rating action on the total return swap counterparty, we would take a corresponding rating action on the notes.

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