Monumental rating moves

Monumental Global Funding has had as much as $725 million of bonds outstanding in the domestic market but now has only one $200 million, November 2011, bond remaining.  Moody's Investor Service changed the outlook on the 'Aa3' long-term ratings assigned to Monumental's funding programs, to negative from stable, last week. This resulted from a similar outlook change on the senior debt rating assigned to the ultimate parent, Aegon N.V.

While the Dutch State recently announced a €3.0 billion capital injection for the group to offset the capital deterioration that has occurred and is yet to occur in investment portfolios, the negative outlook reflects the risk that losses and impairments could exceed expectations.

Fitch Ratings also changed the outlook on the ratings that it assigns to the group, to negative from stable, for the same reasons, but does not assign an outlook to rated bonds issued under Monumental's various funding programs.

Moody's has become the next rating agency to move on LeasePlan Corporation N.V. and its subsidiaries after Standard & Poor's lowered the group's ratings three weeks ago. Moody's has placed its Bank Financial Strength Rating of C and long-term debt rating of 'A3' and other ratings assigned to the group (including the 'A3' rating assigned to LeasePlan Australia) on review for possible downgrade.

The review will assess the impact of current market conditions on LeasePlan's medium-term liquidity profile and address longer term concerns over the solvency and profitability impact of a marked deterioration of the automotive market across LeasePlan's franchise. LeasePlan Australia has $890 million of bonds outstanding in the domestic market.

Notes issued by Mobius ELR-01 Trust were the subject of rating action by Moody's, as it concluded a review initiated in May, when Mobius Financial Services retired as Trust Manager and Master Servicer of this trust and other associated trusts. Pepper Australia Pty Ltd and Perpetual Nominees Ltd have been appointed as Trust Manager and Master Servicer, respectively.

While the appointments are considered as credit positive, Moody's has taken into account further deterioration in the performance of the underlying receivables pool. As a result the ratings on the Class A and B notes were lowered to 'A3' from 'A2' and to 'B3' from 'B2', respectively. Ratings on the Class C and D notes were affirmed.

Fitch also acknowledged the aforementioned changes in trust manager and master servicer and affirmed the ratings assigned to notes issued by the Mobius NCM-03 and NCM-04 Trusts, with the exception of the Class E and F tranches of the latter, which remain on Rating Watch Negative due to concerns over expected charge-offs yet to be realised.

All ratings assigned by Fitch to the Mobius ELR-01 Trust notes remain on Rating Watch Negative, also due to concern over the poor performance of the underlying asset pool.

In apparent contrast, the strong performance of the asset pool underlying the Q10 notes - a pool of nonconforming, subprime, mortgages originated by GE Mortgage Solutions - and resulting build-up of credit enhancement, has enabled Moody's to upgrade the Class B, C and D notes. The upgrades are to 'Aaa' from 'Aa2', to 'Aa2' from 'A2' and to 'Baa1' from 'Baa2', respectively.

Disappointing fiscal 2008 results from The Griffin Coal Mining Company Pty Ltd. prompted S&P to lower the long-term credit rating assigned to the company to 'B+', from 'BB-' , and leave the rating on CreditWatch with negative implications.

Resolution of the CreditWatch will be determined by a detailed review of the prospects for a timely improvement in Griffin's financial profile. A downgrade of more than two notches is unlikely, according to S&P.

Moody's mirrored S&P's actions, lowering its ratings assigned to the company to 'B1' from 'Ba3' but left a negative outlook on the rating. Griffin issued US$475 million of 10 year bonds in November 2006.

S&P revised the CreditWatch on the 'BBB+/A-2' ratings assigned to Rio Tinto to developing from positive, in a move that has since been interpreted as being a negative for Rio's defence of the takeover bid from BHP Billiton. S&P initially placed the ratings on CreditWatch Positive when BHP launched its bid last November but has since come to the view that increasing negative pressures could adversely impact the ratings.

Limited progress with asset sales and weaker commodity prices mean that Rio's debt burden has remained high and it has a high level of short-term debt too. These challenges must now be faced in a weaker global economic environment. If the takeover bid from BHP does not succeed, the ratings assigned to Rio could be affirmed or lowered.