Two opposing rating drivers prompted the rating action, the company said in a written note. One driver was Moody's announcement on Aug. 3 that it has placed the global local currency (GLC) deposit ratings of certain Turkish banks on review for possible downgrade. "This may negatively impact the rating of some DPR transactions, as such ratings are typically capped and retain linkage to the GLC rating of the originating banks," the company statement read. The other driver was Moody's lowering of its assessment of the risk that the Turkish government would divert DPR payments away from the issuer. "As a result of this positive reassessment, a Turkish DPR transaction, in the absence of any transaction specific concerns, can now achieve a rating equal to the GLC rating of the originator," the Moody's note asserted. As all Turkey's DPR notes are currently rated Baa2, which is lower than the GLC rating of some of the originating banks, this could positively impact some of the DPR ratings, it added.
A DPR transaction is a type of securitization of receivables arising from future money-order payment contracts. This means the originator's future ability to originate these contracts is of great importance.
The companies in question are Akbank Remittance Trust Securitization Ltd., Garanti Diversified Payment Rights Finance Company, İş Bankası Diversified Payment Rights, Vakıfbank DPR Finance Company, Yapı Kredi Diversified Payment Rights Finance Company and DFS Funding Corporation.
In relation to the notes benefiting from financial guarantees, Moody's has placed the underlying ratings on review with any ratings change uncertain, which reflects the risk to the providers of financial guarantees.
Moody's said its ratings address only the credit risks associated with the transaction. Non-credit risks will not be taken into consideration during the review process, the company noted, but warned that these risks may have a significant effect on yield to investors.
