Share Search
Visit the Share Search
You are here:
The following is a press release from Moody's Investors Service: JPY 5.0 billion of trust certificates affected Tokyo, June 09, 2010 -- Moody's Investors Service has assigned provisional rating to the trust certificates, totaling JPY 5.0 billion, backed by handset installment sales receivables and originated by SOFTBANK MOBILE Corp. The ratings address the expected loss posed to investors by the final maturity date. The structure allows for timely payment of dividends (in scheduled amounts, on scheduled payment dates) and ultimate payment of principal by the final maturity date. Moody's issues provisional ratings in advance of the final sale of securities. These ratings, however, represent Moody's preliminary credit opinions only. Upon a conclusive review of the transaction and associated documentation, Moody's will endeavor to assign definitive ratings to the securities. Definitive ratings may differ from provisional ratings. The provisional rating is based on information received as of June 8, 2010. The ratings and transaction are summarized below: Deal Name: SBM Handset Installment Receivables Securitization 2010-6 Senior Trust Certificates, Assigned (P)Aaa Total Issue Amount: JPY5.0billion Dividend: Floating Payment Frequency: Monthly(First payment date is October 4, 2010) Scheduled entrustment date: June 24, 2010 Final Maturity Date: December 4, 2012 Scheduled first principal & dividend payment date for senior trust certificates: October 4, 2010 Underlying Asset: handset installment sales receivables Seller/Servicer: SOFTBANK MOBILE Corp. ("SBM") Trustee: Mizuho Trust & Banking Co., Ltd. ("Mizuho Trust") Back-up Servicer: Japan Collection Service Co., Ltd. STRUCTURE OVERVIEW SBM will entrust a pool of installment sales receivables and cash to Mizuho Trust, the Asset Trustee, in accordance with an Installment Sale Receivables and Cash Trust Agreement, and will receive the Senior Trust Certificates, the Class A through C Seller Trust Certificates, and the Subordinated Trust Certificates. Entrustment of the installment sales receivables will be perfected against third parties pursuant to the Perfection Law (the Law Prescribing Exceptions, Etc. to the Civil Code Requirement for Setting Up Against a Third Party to an Assignment of Claims [Law No. 104, 1998]). Perfection against obligors will not be made until certain events occur. Investors will acquire the Senior Trust Certificates from SBM. The transfer of the Senior Trust Certificates will be perfected against obligors and third parties under Article 94 of Japan's Trust Law. The Trustee will purchase an interest rate cap from a cap provider to hedge its interest rate risk. The transaction's rating will be linked partly to the cap provider's risk. Credit enhancement is provided by the senior/subordinated structure. Subordination is approximately 19.1 % of the total amount of Senior Trust Certificates and Subordinated Trust Certificates. In preparation for servicer replacement, an upfront cash reserve to provide liquidity and a trigger mechanism (servicer replacement preparation events) to provide additional enhancement will be provided. Commingling risk is covered by the advance payment of collections from the underlying assets and subordinated trust certificates. RATING OPINION SUMMARY Moody's assumes that the risk of interruption to cash flow from the assets due to the seller's or the Asset Trustee's bankruptcy is considered sufficiently minimal to achieve the rating assigned. The assets are handset installment sales receivables originated by SBM and are diversified, because the obligors are consumers and the average outstanding amount is low, at approximately JPY 50,000. Having factored in the receivables' attributes, historical data on the seller's entire pool, ongoing performance data on existing securitization pools, and telecommunications charges, Moody's estimates the annual default rate at 2.2% to 2.7%. Moody's believes that each credit enhancement of the Senior Beneficial Interests is sufficient enough to assign Aaa rating to the transaction. (These parameters are that Moody's input into the model to analyze and may differ from the seller's definition.) Moody's has examined SBM's business and considers the company sufficiently capable of servicing the handset installment sales receivables as SBM, as an initial Servicer, has substantial experience in the mobile telecommunications carrier industry. Moody's has rated SBM's existing whole business securitizations and monitors the transactions on an ongoing basis Seller/Servicer SOFTBANK MOBILE Corp. (SBM), headquartered in Minato-ku, Tokyo, is a Japanese mobile telecommunications operator that launched services in 1994. In October 2001, the three J-PHONE operating companies became part of Vodafone Group Plc, the world's largest operator of mobile telecommunications networks. In November 2001, J-PHONE Co., Ltd. was formed through the merger of three J-PHONE operating companies and J-PHONE Co., Ltd., the holding company. In October 2003, J-PHONE Co., Ltd. changed its name to Vodafone K.K. In April 2006, Vodafone K.K. was acquired by SOFTBANK CORP., and became a SOFTBANK Group company. Vodafone K.K. changed its name to SOFTBANK MOBILE Corp. on October, 2006. SBM reported operating revenue of JPY 841.9 billion and operating income of JPY 146.9 billion for the first half of the fiscal year ending March 31, 2010, with JPY 3,341.2 billion in total consolidated assets at the end of the period. With 22.34 million subscribers as of the end of May 2010, the company is the third-largest mobile telecommunications operator in Japan after NTT DoCoMo, Inc. and KDDI Corporation. V Score The V Score for this transaction is Low/Medium. Moody's has assigned ratings to the Originator's handset installment sales receivables ABS since June 2007. Moody's conducted its analysis using historical data, including that which Moody's had received in those past transactions, and that of telecommunication contracts whose history is longer than handset installment sales receivables. Moody's V Scores provide a relative assessment the potential variability of various inputs in a rating determination. The V Score ranks transactions by the potential for significant rating changes owing to uncertainty on the assumptions due to data quality, historical performance, the level of disclosure, transaction complexity, modeling, and the transaction governance that underlie the ratings. V Scores apply to the entire transaction (rather than to individual tranches). Parameter Sensitivities If the assumed annual default rate used in determining the initial rating were changed to either 5.2% or 6.4%, the quantitative or model-indicated Parameter Sensitivities for the Senior Beneficial Interest in these two scenarios would be a zero notch down for the 5.2% default rate and one notch down for the 6.4% default rate. Parameter Sensitivities are not intended to measure how the rating of the security might migrate over time; rather they are designed to provide a quantitative calculation of how the initial rating might change if key input parameters used in the initial rating process differed. The analysis assumes that the deal has not aged, and does not factor structural features such as sequential payment effect. Parameter Sensitivities reflect only the ratings impact of each scenario from a quantitative/model-indicated standpoint. Qualitative factors are also taken into consideration in the ratings process, so the actual ratings that would be assigned in each case could vary from the information presented in the Parameter Sensitivity analysis. Reference to relevant methodology The principal methodology used in rating the transaction was "Moody's Approach to Rating Japanese Installment Sales Loan Receivables ABS," published in February 2010, which can be found at www.moodys.com in the Research & Rating directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this transaction can also be found in the Rating Methodologies subdirectory. In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck. The methodology, "Updated Report on V Scores and Parameter Sensitivities for Structured Finance Securities" published in December 2008, is available at www.moodys.com. Moody's Investors Service is a publisher of rating opinions and research. It is not involved in the offering or sale of any securities, nor is it acting on behalf of the offering party. This release is not a solicitation or a recommendation to buy, hold or sell securities. Copyright 2010 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR (MORE TO FOLLOW) Dow Jones Newswires June 09, 2010 03:41 ET (07:41 GMT)