Spirit Master Funding LLC/Spirit Master Funding II LLC/Spirit Master Funding III LLC (Series , , And )

Transcription

1 Presale: Spirit Master Funding LLC/Spirit Master Funding II LLC/Spirit Master Funding III LLC (Series , Primary Credit Analyst: John F Lampasona, New York (1) ; john.lampasona@standardandpoors.com Analytical Manager, U.S. Structured Credit New Issuance: Winston W Chang, New York (1) ; winston.chang@standardandpoors.com Table Of Contents $ Million Net-Lease Mortgage Notes Series , , And Rationale Transaction Strengths Transaction Weaknesses Mitigating Factors Business Description: Spirit Underwriting Guidelines Industry Characteristics: Sector Outlook Transaction Comparison Pool And Structural Characteristics APRIL 9,

2 Table Of Contents (cont.) Mortgage Loans Transaction Structure Standard & Poor's Stress Scenario Assumptions Cash Flow Analysis Legal Structure Standard & Poor's 17g-7 Disclosure Report Related Criteria And Research APRIL 9,

3 Presale: Spirit Master Funding LLC/Spirit Master Funding II LLC/Spirit Master Funding III LLC (Series , $ Million Net-Lease Mortgage Notes Series , , And This presale report is based on information as of April 9, The ratings shown are preliminary. This report does not constitute a recommendation to buy, hold, or sell securities. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. Preliminary Ratings As Of April 9, 2014 Series/class Preliminary rating(i) Preliminary amount (mil. $)(ii) LTV (%) class A1 A+ (sf) class A2 A+ (sf) class A A+ (sf) class A A+ (sf) (i)the ratings are preliminary and subject to change at any time. The ratings do not address post-ard interest. (ii)principal balance as of May 20, 2014 payment date. Balance assumes 100% participation in the exchange. LTV--Loan-to-value ratio. ARD--Anticipated repayment date. Profile Expected closing date May 20, 2014 Collateral Issuers Property manager and special servicer Originator Back-up manager Indenture trustee Sole structuring advisor Dealer managers As of the series closing date, the collateral will consist primarily of fee titles to 647 commercial real estate properties and 82 properties securing 11 mortgage loans that are secured by fee titles to commercial real estate properties across various industry sectors, and all payments required thereunder on and after the series closing date. Spirit Master Funding LLC, Spirit Master Funding II LLC, and Spirit Master Funding III LLC a Delaware limited liability company established by an affiliate of and directly owned by Spirit Realty Capital Inc. Spirit Realty L.P. Spirit Realty or one of its affiliates. Midland Loan Services. Citibank N.A. Morgan Stanley. Morgan Stanley and Deutsche Bank Securities. Rationale The preliminary ratings assigned to Spirit Master Funding LLC/ Spirit Master Funding II LLC/ Spirit Master Funding III LLC's net-lease mortgage notes series , , and reflect our opinion of the credit enhancement available in the form of overcollateralization (the aggregate collateral value less the initial series principal balance) and the available cushion as measured by the issuers' beginning cash flow coverage ratio of approximately 1.8x. Our APRIL 9,

4 preliminary ratings also reflect our view of Spirit Realty L.P.'s (Spirit's or the servicer's) property management and special servicing abilities, the projected cash flows supporting the notes, and the transaction's structure. The three series are an exchange of the issuer's series , , and notes. The new series will have the same coupons and current outstanding principal balances as of the last payment date for series , , and ; however, the final maturity has been extended, the amortization schedule has been adjusted extending the weighted average life, and the bond insurer has been removed. Transaction Strengths The transaction's strengths, in our opinion, include the following: The properties are typically essential to their respective tenants' operations and ability to generate revenues; The triple-net nature of the leases requires the tenants to pay all maintenance, taxes, and insurance on the properties; The properties are geographically diversified across 44 states; The majority of the properties are subject to master leases, which may reduce the potential weakness of any individual property to generate income to support the notes; The securitization structure includes the property manager's and the back-up manager's obligation to make interest and property protection advances to the extent deemed recoverable; The level of principal amortization before the anticipated repayment date (ARD) is moderate; and The transaction includes certain performance tests, such as early amortization and a sweep period. Transaction Weaknesses The transaction's weaknesses, in our opinion, include the following: The tenants' ability to relocate may decrease the occupancy rate and lease income; Some of the properties are not located in densely populated areas; The time needed to find replacement tenants when leases expire or terminate may reduce cash flows; The largest industry group (restaurants) represents approximately 38% of the collateral value and approximately 65% of the number of properties; A small portion of the pool (2.5%) operates in an industry that may be exposed to additional environmental liabilities in the future; and The properties may be subject to laws and regulations relating to human health and the environment. Mitigating Factors The following factors, in our opinion, partly mitigate the transaction's weaknesses: Spirit's strategy mainly focuses on operationally essential real estate, which may help reduce tenant relocation upon lease expiration. The properties generally possess good unit-level profitability and have a non-zero weighted average fixed-charge coverage ratio of approximately 2.6x. APRIL 9,

5 The portfolio benefits from a diverse geographic footprint and tenant base. The properties' general design may accommodate various business types and allows for greater flexibility to replace outgoing tenants. Our stress scenarios assume no recovery if tenants that operate in industries that may be exposed to additional future environmental liabilities default. An environmental site assessment was completed for each property, revealing no material adverse environmental conditions or the need for environmental insurance policies. Furthermore, the typical lease includes indemnifications by the tenant for various liabilities at the properties, including potential environmental conditions. Under our stress scenarios, timely interest and ultimate principal payments are paid on the notes by legal final maturity. Business Description: Spirit Spirit, based in Scottsdale, Ariz. is the second-largest publicly traded triple-net lease REIT in the U.S. Spirit has primarily invested in, and intends to seek to continue to primarily invest in, single-tenant, operationally essential real estate throughout the U.S. This consists of properties that are generally freestanding, commercial real estate facilities where tenants conduct primarily retail, service, or distribution activities that Spirit believes are essential to their sales and profits. To support its primary business of owning and leasing real estate, Spirit and its affiliates have also strategically originated or acquired long-term, commercial mortgage, and equipment loans. Spirit seeks to invest in properties that are leased to small and middle-market companies that they believe have attractive credit characteristics and stable operating histories, many of which operate numerous facilities. Small and middle-market companies are often willing to enter into leases with structures and terms that Spirit considers attractive (such as master leases and leases that require ongoing tenant financial reporting) and that it believes increase the likelihood of rental payments. For example, by acquiring multiple properties from a small or middle-market company and leasing them back to the seller under a master lease, the leased properties may represent a meaningful percentage of the tenant's overall operations and increase the importance of the lease to the tenant's business. Underwriting Guidelines Each originator uses an underwriting process focused on an analysis of four core factors: Tenant corporate performance, credit underwriting, and financial distress risk; Unit-level performance; Tenant management; and Underlying real estate analysis. This analysis helps Spirit assess customer risk and whether or not to acquire a particular property, enter into a lease with a customer, or finance a particular customer. APRIL 9,

6 Industry Characteristics: Sector Outlook Standard & Poor's Ratings Services' outlook for retail real estate landlords remains generally stable. However, we acknowledge there are both risks and opportunities facing certain segments of the retail property sector given the steady rise of ecommerce and shifting consumer buyer behavior. As such, we could see elevated merger and acquisition activity as landlords seek to rebalance their portfolios to bolster asset quality or reduce tenant concentrations. We believe that fundamentals in the strip center subsector should continue to strengthen this year, with improvement coming more from rent (versus occupancy), as portfolios begin to get closer to full occupancy. Fewer tenant move-outs in the small shop space, and a lack of new supply will likely lead to a slightly stronger leasing environment. However, in less defensive markets, contraction by some national tenants will put inventory back on the market. We think better-positioned tenants will continue to trade up into higher-quality, more productive space as their leases expire. Transaction Comparison We compared this transaction to the STORE Master Funding I-IV LLC (STORE) and the Spirit Master Funding VII LLC, which we rated in 2013 (see "Presale: Spirit Master Funding VII LLC, published Dec. 10, 2013, and "Presale: STORE Master Funding I-IV LLC," published Nov. 20, 2013). All three transactions are collateralized primarily by commercial real estate properties (see table 1). Table 1 Transaction Comparison Spirit Master Funding I, II, and III LLC Spirit Master Funding VII LLC (i) STORE Master Funding I-IV LLC (ii) Lease (%) Mortgage loans (%) Largest industry group concentration (%) Largest state concentration (%) Non-zero weighted average FCCR (iii) (i)as of October (ii)as of October (iii)denoted as weighted average unit FCCR. FCCR--Fixed charge coverage ratio. Pool And Structural Characteristics The issuers have granted a lien on the collateral included in the pool to the indenture trustee for the noteholders' benefit. Spirit will guaranty the cure, repurchase, exchange, and indemnification obligations of the applicable originators under the property transfer agreements. Further, if the issuer acquires certain assets from an unaffiliated third party, Spirit will have certain cure or repurchase obligations if certain representations or warranties related to this are breached. The issuers may also substitute certain properties subject to specific criteria to maintain the pool's characteristics (see table 2 for the pool characteristics as of the Dec. 31, 2013, cutoff date). APRIL 9,

7 Table 2 Pool Characteristics Aggregate collateral value (mil. $) 1,520.3 No. of mortgaged properties 729 No. of leases 647 No. of mortgage loans 82 Average collateral value (mil. $) 2.1 Range of collateral value ($) Weighted average original lease or mortgage loan term (mos.) Weighted average remaining lease or mortgage loan term (mos.) Range of original lease or mortgage loan term (mos.) Range of remaining lease or mortgage loan term (mos.) 63, million Non-zero weighted average FCCR 2.6 Largest five tenants/borrowers (i) Universal Pool Co. Inc. (5.04%), Carmike Cinemas Inc. (4.11%), Goodrich Quality Theaters Inc. (3.65%), Crème De La Creme Inc. (2.94%), and Pilot Travel Centers LLC (2.51%) Largest three business sectors (i) Restaurants (37.7%), specialty retailers (13.0%), and movie theaters (12.8%) Largest three state concentrations (i) Texas (11.8%), Illinois (10.9%), and Georgia (6.6%) (i)by collateral value. FCCR Fixed charge coverage ratio. Mortgage Loans Mortgage loans constitute approximately 5.2% of the total aggregate collateral value. Further, approximately 2.5% of the mortgaged aggregate collateral value operates in the gas station/convenience store industry, which may be exposed to additional environmental liabilities in the future. Under our stress scenarios, we assumed no recovery upon default for these borrowers. Transaction Structure The issuers are bankruptcy-remote special-purpose entities (SPE) that may, in the future, issue additional series of notes secured by the entire collateral pool. As of the closing date, the issuers will have three series of notes (series , , and ) outstanding. Each month, available funds will first be used to pay expenses on the collateral pool in the order of priority shown in table 3. Table 3 Collateral Pool Expense Waterfall Priority Payment 1 First, to the indenture trustee, then, pari passu, to the property manager or the back-up manager, reimbursement for unreimbursed property protection advances; second, to the special servicer, the special servicing fee, liquidation fees and workout fees incurred. APRIL 9,

8 Table 3 Collateral Pool Expense Waterfall (cont.) 2 Pro rata: the indenture trustee fees; property management fee; to the extent not already paid in item 1 above, the special servicing fees; back-up manager fee; the custodian fee; to the parties entitled thereto, the issuer expenses, subject to cap; first, to the indenture trustee, and second, pari passu, to the property manager or the back-up manager, reimbursement for unreimbursed P&I advances and unreimbursed property protection advances that have been determined to constitute nonrecoverable advances; and then first, to the indenture trustee, and second, to each other relevant party, the extraordinary expenses for which amounts have not already been allocated above, subject to cap. 3 To any reserve account, up to an amount with respect to which the affirmative rating condition has been satisfied. P&I--Principal and interest The available amount remaining on any payment date after the collateral pool expenses above have been paid will be allocated among each series as shown in table 4. If, at a future date, the issuer (or any subsequent co-issuers) issues additional series of notes, the funds remaining after paying the collateral pool expenses will first be distributed among all of the outstanding series and then the amount allocated to each series will be distributed in the order of priority shown in table 4. Table 4 Series Waterfall Priority Payment 1 Series class A-1 and A-2, , and interest, pro rata, and any net payment due or proceeds received (excluding any termination payments due from an issuer or co-issuer because of a default or termination event regarding any hedge counterparty) under any hedge agreement. 2 So long as no early amortization event has occurred and is continuing: first, pro rata, based on amounts owed to each series, to series , series , and then series , the scheduled series principal payments due, and to each series of related series notes, the applicable related series scheduled principal payment due (and any unpaid scheduled principal payments that were due on any previous payment dates); and second to each series, its pro rata share of the amount of the unscheduled principal payment, if any. 3 During an early amortization event, pro rata, to series , to reduce each class' principal balance to zero, to series , to reduce each class' principal balance to zero, to series , to reduce each class' principal balance to zero, and then to reduce the outstanding principal balance of each related note series to zero. 4 If a sweep period is in effect (but the average cash flow coverage ratio equals or exceeds the early amortization threshold) and no early amortization event has otherwise occurred and is continuing, to the cash flow coverage reserve account: the sum of the amount that would be required to be added to the cash flow coverage ratio numerator in respect of the applicable determination date to achieve a cash flow coverage ratio equal to the sweep period threshold on that determination date plus the aggregate shortfalls, if any, of the amount that would have been deposited into the cash flow coverage reserve account on any previous payment date if there weren't insufficient available amounts on that payment date; or if the average cash flow coverage ratio is below the early amortization threshold and the requisite global majority waives the related early amortization event, to each series, its pro rata share (calculated after applying the allocations described in item 2 above) of an amount equal to the sum of: all amounts on deposit in the cash flow coverage reserve account as of such payment date (immediately before any release of amounts from the cash flow coverage reserve account in respect of such payment date) plus (the aggregate shortfalls, if any, of the amount that would have been deposited into the cash flow coverage reserve account on any prior payment date if there weren't insufficient available amounts on that payment date. 5 To any hedge counterparty for the notes or the related series notes, any and all amounts (including any termination payments) due on the payment date to the hedge counterparty for the notes or the related series notes not paid in item 1 above, pro rata, based on the amounts due to the hedge counterparties in this item. 6 To series , and , pro rata, make-whole payments, if any. 7 Pro rata, to series , the aggregate unpaid post-ard additional interest and deferred post-ard additional interest, if any, to series , the aggregate unpaid post-ard additional interest and deferred post-ard additional interest, if any, to series , the aggregate unpaid post-ard additional interest and deferred post-ard additional interest, if any, and to each series of related series notes, the aggregate unpaid post-ard additional interest and deferred post-ard additional interest, if any, accrued on the that series as of the payment date. 8 The available amount remaining after the allocations described above will be applied first, to pay any issuer expenses not paid from the available amount according to the above allocations; and second, to the issuers and any applicable co-issuers (such amounts to be released from the lien of the indenture) or, at the option of the applicable issuer or co-issuer, to the release account. ARD--Anticipated repayment date. APRIL 9,

9 A sweep period will occur if the current cash flow coverage ratio is less than 1.25x (sweep period threshold), continuing until the current cash flow coverage ratio is above 1.25x for three consecutive determination dates, at which time 50% of the funds on deposit in the cash flow coverage reserve account will be released and the remaining 50% of the funds will be released if such ratio is above 1.25x for three additional consecutive determination dates. An early amortization event will occur if: The average cash flow coverage ratio is less than 1.10x (early amortization threshold); An indenture event of default has occurred and not cured or waived; Any classes of notes are not paid in full on or prior to the ARD; or Any early amortization event in subsequent series of notes that may be applicable, provided that such event caused by the first item will be deemed to have been cured if such ratio is above the early amortization threshold for three consecutive determination dates, and such cure may only occur two times in any calendar year and no more than five times total. The cash flow coverage ratio is calculated as the monthly loan and lease payments plus income earned from collection accounts plus any hedge payments received, divided by the scheduled interest and principal payment for that period plus certain fees, expenses, and any hedge payments paid by the issuers. The property manager is obligated to make interest or principal advances on the notes, to the extent they are deemed recoverable. The advances are meant to cover any shortfalls resulting from timing mismatches because of missed lease payments or property vacancies, as well as any interest and principal shortfalls. This requirement excludes principal payments in the post-ard periods, make-whole amounts, post-ard additional interest, and deferred post-ard additional interest. If the property manager fails to make an advance, the back-up manager is required to make the advance in its place. These requirements for advances serve as a form of liquidity for the notes. Standard & Poor's Stress Scenario Assumptions In our opinion, the risk to the cash flow generated from the portfolio of properties and their associated leases stems from five major factors: Defaults of the initial pool of tenants (the lessees) and borrowers under the mortgage loans; The property manager's ability to re-lease the properties vacated by defaulted lessees to new tenants, and the renewal rate of tenants who reach the end of their leases; The property manager's ability to maximize recovery on defaulted mortgage loans; The lease terms for new tenants (rental rate and term of lease); and The liquidation value of those properties that the manager is unable to re-lease and chooses to liquidate. We used Standard & Poor's CDO Evaluator, our ratings on the lessees or borrowers (or 'CCC-' for unrated lessees and borrowers), the collateral value, and the lease term or mortgage loan expiration to determine the initial pool of lessees' initial default rate. Under our 'A+' stress scenarios, our default assumption for the portfolio is 64.2%. Of the properties not subject to a mortgage loan in which a tenant defaulted, we assumed that 50.0%-67.5% (under various scenarios) would be sold at a stressed liquidation value of 21.8% of the appraised value under an 'A+' stress, APRIL 9,

10 subject to a 12-month lag. We assumed the remaining mortgage properties were re-leased for a second lease cycle (subject to a 12-month lag) with lease terms equal to 90% of the weighted average original term of the leases in the portfolio and at a rental rate equal to 90% of the initial rental rate. At the end of this second lease cycle, we assumed the properties would be liquidated at 45.1% of the appraised value under an 'A+' stress. For the mortgage loans in the portfolio, we assumed additional stresses (to reflect potential time delay and additional costs associated with the issuers' exercise of their remedies for those mortgage loans). For mortgage loans, we assumed the stressed liquidation value as 90% of the stressed liquidation value for non-mortgage loan properties. Further, for the mortgage loans where the borrower operates in an industry that may be exposed to additional future environmental liabilities,, including properties which were gas stations before their current use, we assumed the stressed liquidation value of 0%. We assumed the time lag for liquidation if a borrower defaults on a mortgage loan to be 24 months. We assumed that all nondefaulted leases would be liquidated at 45.1% of the appraised value under an 'A+' stress. To determine the various liquidation values assumed above, we estimated the properties' values using Standard & Poor's commercial real estate methodology under three specific circumstances: The property is occupied by a tenant that is making full payments under the lease (the leased value). In determining each property's leased value, we assumed rental income based on the in-place leases, the appraiser's estimate of market rent, and recent leasing data from the market. We also applied a vacancy deduction to the potential gross income. We estimated expenses and expense reimbursements based on information from the appraisals and comparable properties. These expenses included fixed items such as real estate tax and insurance, estimated management fees, and variable expenses which were reimbursed in our income projections. We determined net cash flow after deducting estimated leasing commissions, tenant improvement expenses, and capital reserves/expenditures based on forecasted lease roll assumptions. We selected direct capitalization rates based on such factors as appraisal and market capitalization rates, property performance and tenant strength, and property type. The property is unoccupied but is still a viable location that can be used with minor structural improvements (the dark value). In determining a dark value, we assumed each property was unoccupied and unencumbered by any leases. Because we viewed this operating performance decline as temporary, we stabilized the dark properties with income and expense projections based on market data and information from the appraisal. We deducted capital items from Standard & Poor's net operating income, including tenant improvements and leasing costs required to lease up the entire unoccupied space, and estimated one year of downtime for the lease up. We used a stressed capitalization rate for this analysis. The property is no longer a viable location for the existing tenant or another related business and must undergo major construction for alternate use. In these cases, we typically limit the liquidation value to that of the land (the land value). For each rating stress scenario, we assumed a mix of dark and land values for the properties being liquidated after a lessee or borrower default, and we assumed a leased value for the properties being liquidated at the end of the second lease cycle. We also assumed additional valuation stresses for the 'A+' stress scenarios. APRIL 9,

11 Cash Flow Analysis To determine whether the available credit support is sufficient to withstand the assumed losses, we examined various simulated cash flow scenarios. In each, the cumulative effects of the assumptions we detailed above were four default curves in one or two default cycles (see tables 5 and 6). In each scenario, the notes did not experience an interest shortfall and all note principal was paid by the final maturity date. Although the transaction documents require the property manager and back-up manager to make advances on interest payments (to the extent deemed recoverable), we did not assume any advances in the cash flow modeling scenarios. Table 5 Default Curves (%) Year Curve 1 Curve 2 Curve 3 Curve N/A 6 N/A 10 N/A N/A N/A--Not applicable. Table 6 Cash Flow Scenarios Scenario Default curve used for first wave (starts year one) Default curve used for second wave (starts end of year 10) % of defaulted properties liquidated at stressed value 1 1 N/A N/A N/A N/A N/A N/A N/A N/A N/A--Not applicable. We also examined additional scenarios under which the starting period of the first wave of defaults varied from year one to determine the transaction's sensitivity to such changes. These scenarios proved to be less stressful to the transaction than those listed in table 6 above (i.e., the notes experienced no interest or principal shortfalls and more residual cash flowed back to the issuers than in the above scenarios). APRIL 9,

12 Legal Structure The issuers are bankruptcy-remote, Delaware limited-liability companies formed solely to hold the mortgaged properties, leases and mortgage loans, and to issue notes. On or before the series closing date, each originator will convey the applicable mortgage loans, mortgaged properties, and related leases to the issuer pursuant to the property transfer agreements or similar agreements, each among the respective originator and the issuer. We expect the issuers' SPE provisions to be consistent with Standard & Poor's bankruptcy-remoteness criteria. In rating this transaction, Standard & Poor's will review the legal matters that it believes are relevant to its analysis, as outlined in its criteria. Standard & Poor's 17g-7 Disclosure Report SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at Related Criteria And Research Related Criteria CMBS Global Property Evaluation Methodology, Sept. 5, 2012 Principles Of Credit Ratings, Feb. 16, 2011 Related Research Presale: Spirit Master Funding VII LLC, Dec. 10, 2013 Presale: STORE Master Funding I/STORE Master Funding II/STORE Master Funding III/STORE Master Funding IV LLC (Series ), Nov. 20, 2013 Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011 The primary credit analyst would like to thank Tracy Xie for her analytical contributions to this report. APRIL 9,

13 Copyright 2014 Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. All rights reserved. No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P's opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, (free of charge), and and (subscription) and (subscription) and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at APRIL 9,