DBRS Upgrades Superior Trust Series D, E, F and G Floating-Rate Medium Term Notes

DBRS Limited (DBRS) has today upgraded the ratings on the following four series of notes issued by Superior Trust (the Trust):

-- Series D Floating-Rate Medium Term Notes (the Series D Notes) to AA (sf) from A (high) (sf)
-- Series E Floating-Rate Medium Term Notes (the Series E Notes) to A (high) (sf) from A (low) (sf)
-- Series F Floating-Rate Medium Term Notes (the Series F Notes) to AA (high) (sf) from AA (sf)
-- Series G Floating-Rate Medium Term Notes (the Series G Notes) to AA (high) (sf) from AA (low) (sf) (collectively, the Notes)

The Trust is a multi-seller, multi-asset conduit set up as a bankruptcy-remote special-purpose entity that has the ability to purchase, otherwise acquire, originate or enter into asset interests from or with a number of diverse sellers and other counterparties. All sellers and counterparties must be approved by DBRS.

The ratings on the Series D Notes, the Series E Notes, the Series F Notes and the Series G Notes are based in part on the credit quality of the underlying corporate reference entities relative to the available enhancement in the related Credit Default Swaps. Two credit events have occurred in the reference portfolios since the last Superior Trust Notes review in November 2014: Radioshack Corporation and Caesar Entertainment Corporation’s casino operating unit (formerly Harrah’s Operating Company, Inc.) filed for Chapter 11 bankruptcy in early 2015.

Among the remaining corporate entities referenced by the Series D, E, F and G Notes portfolios, there has generally been no major rating migration over the past year and the Notes continue to benefit from an additional year of time decay (a concept whereby a structured credit transaction becomes less risky as its maturity date draws nearer). As a result, stability cushions have increased over the past year, with cushions for the Series D Notes and Series F Notes increasing by at least 110 basis points (bps) and cushions for the Series E Notes and Series G Notes increasing by at least 75 bps.

The scheduled termination of the Notes is September 28, 2016. DBRS continues to actively monitor the credit quality of the Notes and will provide further updates as necessary.

Notes:
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com

The applicable methodologies are Rating CLOs and CDOs of Large Corporate Credit (June 2015) and Canadian Surveillance Methodology for CDOs of Large Corporate Credit (July 2015), which can be found on our website under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.