By k on July 29, 2009

Tokyo, July 29, 2009 -- Moody's Investors Service announced today that it
has downgraded to Aa1 from Aaa the Class 3 trust certificates of the
Tokyo Metropolitan CLO Ninth transaction. The trust certificates had been
under review for possible downgrade since May 19, 2009. At the same time,
Moody's says that it has affirmed the ratings of all other outstanding
classes of the following Japanese regional government-related SME CLO
transactions:

- Tokyo Supporters CLO Special Purpose Company,

- Ordinance-Designated Cities CLO Fourth,

- Santoshi CLO2009,

- Yontoshi CLO2 Tokutei Mokuteki Kaisha,

- Santoshi CLO 2009 Tokutei Mokuteki Kaisha, and

- Class 1A, 1B, 1C and 2 of Tokyo Metropolitan CLO Ninth

These transactions are CLO backed by corporate loans extended to SMEs.
Their underlying loans are either fully guaranteed (Tokyo Supporters CLO
Special Purpose Company only), or 80% guaranteed by the Credit Guarantee
Corporation ("CGC") on a loan-by-loan basis. Under the credit insurance
system, the guarantee obligation of CGC is insured by the Japan Finance
Corporation ("JFC") to as much as 70-80% of the guaranteed amount. The
relevant regional governments compensate those CGC guarantee obligations
which exceed JFC's insured amounts.

Specified Bonds issued by Yontoshi CLO2 Tokutei Mokuteki Kaisha is backed
by Class 1 trust certificates issued under Tokyo Metropolitan CLO Ninth
and Ordinance-Designated Cities CLO Fourth. Specified Bonds issued by
Santoshi CLO 2009 Tokutei Mokuteki Kaisha is backed by Class 1 trust
certificates issued under Santoshi CLO2009.

Moody's says that today's rating actions reflect the rating actions taken
against Metropolis of Tokyo, Osaka City Government, and JFC. On July 28,
2009, Metropolis of Tokyo and Osaka City Government were downgraded to
Aa2 from Aa1 (domestic currency), and on July 22, 2009, JFC was
downgraded to Aa2 from Aaa. Metropolis of Tokyo, Osaka City Government,
and JFC had been under review for possible downgrade since May 18, 2009.
In conjunction with the consideration of guarantor credit changes,
Moody's also considered the current underlying pool performance of each
transaction. Specifically, for Tokyo Supporters CLO, the actual default
rate was higher than our initial expected.

As described above, the ability of CGC to perform its guarantee
obligation strongly relies on the credit quality of the relevant regional
governments as well as JFC. However, the downgrade of their ratings to
Aa2 and the changes in the performance of the portfolios only has a
limited impact on all Aaa ratings except for the Class 3 of Tokyo
Metropolitan CLO Ninth Transaction, hence those ratings are affirmed. On
the other hand, for Class 3 of Tokyo Metropolitan CLO Ninth, the credit
enhancement is not sufficient to support a Aaa rating relative to the
current stressed loss rate in combination with the consideration of
guarantor's current credit assessment. As a result, the rating of the
trust certificates was downgraded to Aa1 from Aaa. At the same time, for
Class 3 of same series (Ordinance-Designated Cities CLO Fourth and
Santoshi CLO2009), its Aa1 ratings were affirmed.

The principal methodologies used in rating these transactions were
"Japan's SME CDOs: Focal Points in Rating Analysis and Monitoring,"
"Repackaged Securities (October 2001)," and "Moody's Refines Its
Approach to Rating Structured Notes (July 1997)," which can be found at
www.moodys.com in the Credit Policy & Methodologies directory, in the
Ratings Methodologies subdirectory. Other methodologies and factors that
may have been considered in the process of rating this issue can also be
found in the Credit Policy & Methodologies directory.

Today's rating actions follow:

Tokyo Supporters CLO Special Purpose Company:

(1) Series 1 Class B JPY13,800,000,000 Specified Bonds due November 2010,
Aaa affirmed; previously on March 9, 2005, assigned Aaa

(2) Series 1 Class C JPY4,300,000,000 Specified Bonds due November 2010,
Aaa affirmed; previously on October 11, 2007, upgraded to Aaa from Aa1

Tokyo Metropolitan CLO Ninth:

(3) Class 1A JPY753,000,000 Trust Certificates, Aaa affirmed; previously
on March 4, 2008, assigned Aaa

(4) Class 1B JPY753,000,000 Trust Certificates, Aaa affirmed; previously
on March 4, 2008, assigned Aaa

(5) Class 1C JPY753,000,000 Trust Certificates, Aaa affirmed; previously
on March 4, 2008, assigned Aaa

(6) Class 2 JPY16,768,000,000 Trust Certificates, Aaa affirmed;
previously on March 4, 2008, assigned Aaa

(7) Class 3 JPY8,684,000,000 Trust Certificates, Downgraded to Aa1 from
Aaa; previously on May 19, 2009, Aaa placed under review for possible
downgrade

Ordinance-Designated Cities CLO Fourth:

(8) Class 1A JPY247,000,000 Trust Certificates, Aaa affirmed; previously
on March 4, 2008, assigned Aaa

(9) Class 1B JPY247,000,000 Trust Certificates, Aaa affirmed; previously
on March 4, 2008, assigned Aaa

(10) Class 1C JPY247,000,000 Trust Certificates, Aaa affirmed; previously
on March 4, 2008, assigned Aaa

(11) Class 2 JPY7,885,000,000 Trust Certificates, Aaa affirmed;
previously on March 4, 2008, assigned Aaa

(12) Class 3 JPY3,971,000,000 Trust Certificates, Aa1 affirmed;
previously on March 4, 2008, assigned Aa1

Santoshi CLO2009:

(13) Class 1A JPY200,000,000 Trust Certificates, Aaa affirmed; previously
on March 12, 2009, assigned Aaa

(14) Class 1B JPY200,000,000 Trust Certificates, Aaa affirmed; previously
on March 12, 2009, assigned Aaa

(15) Class 1C JPY200,000,000 Trust Certificates, Aaa affirmed; previously
on March 12, 2009, assigned Aaa

(16) Class 2 JPY5,085,000,000 Trust Certificates, Aaa affirmed;
previously on March 12, 2009, assigned Aaa

(17) Class 3 JPY3,902,000,000 Trust Certificates, Aa1 affirmed;
previously on March 12, 2009, assigned Aa1

Yontoshi CLO2 Tokutei Mokuteki Kaisha:

(18) Series 1 Class A JPY1,000,000,000 Specified Bonds, Aaa affirmed;
previously on March 4, 2008, assigned Aaa

(19) Series 1 Class B JPY1,000,000,000 Specified Bonds, Aaa affirmed;
previously on March 4, 2008, assigned Aaa

(20) Series 1 Class C JPY1,000,000,000 Specified Bonds, Aaa affirmed;
previously on March 4, 2008, assigned Aaa

Santoshi CLO 2009 Tokutei Mokuteki Kaisha:

(21) Series 1 Class A JPY 200,000,000 Specified Bonds, Aaa affirmed;
previously on March 12, 2009, assigned Aaa

(22) Series 1 Class B JPY 200,000,000 Specified Bonds, Aaa affirmed;
previously on March 12, 2009, assigned Aaa

(23) Series 1 Class C JPY 200,000,000 Specified Bonds, Aaa affirmed;
previously on March 12, 2009, assigned Aaa

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.

Tokyo
Shinji Yoshizawa
Analyst
Structured Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100

Related posts:

1. Moody’s affirms ratings of TORRENS Series 2008-1 Trust following pool Sydney, June 11, 2009 -- Moody's Investors Service has...
2. Moody’s assigns ratings to Polaris Securities CBO SPT 2006-2 Taipei, June 17, 2009 -- Moody's Investors Service has...
3. Moody’s affirms CCT’s Baa2 ratings; outlook negative Singapore, May 26, 2009 -- Moody's Investors Service has today...
4. Moody’s affirms Shinsei Bank’s A3 rating with negative outlook Tokyo, July 02, 2009 -- Moody's Investors Service has affirmed...
5. Moody’s assigns A2 ratings to the Sumitomo Corporation’s series 37 Tokyo, July 10, 2009 -- Moody's Investors Service has assigned...

Related posts brought to you by Yet Another Related Posts Plugin.

Readers Comments