Ratings Detail
| Current ratings | ||||
|---|---|---|---|---|
| Type(i) | Rating | |||
| Standard ABCP notes | A-1 (sf) | |||
| Callable ABCP notes | A-1 (sf) | |||
| Puttable ABCP notes | A-1 (sf) | |||
| Callable/puttable ABCP notes | A-1 (sf) | |||
| Euro standard ABCP notes | A-1 (sf) | |||
| (i)The ABCP notes listed above can be issued at a discount or bear interest at a fixed or floating rate. To the extent any seller-related borrowings are LIBOR-based, fallback provisions are applicable referencing alternate rates such as SOFR, the Federal Funds Rate, or any other base rate with varying reset periods as specified in the transaction documents. The ABCP is denominated in U.S. dollars. The euro standard ABCP may also be denominated in British pounds or euros. ABCP--Asset-backed commercial paper. | ||||
Rationale
The short-term 'A-1 (sf)' ratings assigned to the ABCP issued on Sunderland Receivables S.A.'s (Sunderland) U.S. dollar (USD) denominated standard, callable, puttable, and callable/puttable asset-backed commercial paper (ABCP) notes and euro standard ABCP notes are primarily based upon:
- The program's legal structure, including Sunderland's intended bankruptcy-remote status;
- The full credit and liquidity support provided by liquidity agreements for all transactions funded in the program;
- Support providers rated 'A-1' or higher that provide liquidity or indemnification support for any hedging shortfalls.
- The experience and ability of Barclays Bank PLC as program administrator to carry out day-to-day operational services to Sunderland, such as adding new sellers and monitoring seller performance, monitoring maturities, and if necessary, drawing on liquidity and credit facilities to repay the notes on a timely basis.
Environmental, Social, And Governance
The credit quality of the underlying assets is not material to our rating analysis, and so there generally are no material environmental, social, and governance (ESG) credit factors at the asset level. Support providers in ABCP conduits are typically highly rated financial institutions, and our assessment of their creditworthiness incorporates any material ESG credit factors. In our view, exposure to ESG factors in this transaction is limited to the factors related to the support provider. For further information, see our U.S. and Canadian, EMEA, Asia-Pacific, and Latin American bank ESG industry report cards (https://www.spglobal.com/ratings/en/products-benefits/products/esg-in-credit-ratings#sector-report-cards).
Program Structure
The chart below shows an overview of the program structure.
Chart 1
Key Features
Sunderland is established to issue USD-denominated ABCP and euro ABCP that can be issued at a discount or bear interest at a fixed or floating rate. The maturity date on the U.S. ABCP is not greater than 360 days and for the euro ABCP is not greater than 183 days. The proceeds of the ABCP issuance will be used to finance the purchase of financial assets, which will be identified and arranged by Barclays for acquisition. There is no environmental risk or related liabilities due to equity or operating assets, since the conduit will purchase financial assets.
ABCP can be issued in the U.S. (in USD) through the U.S. issuing and paying agent (IPA), or globally through the euro IPA. The U.S. ABCP can be standard, callable, puttable, or puttable/callable ABCP notes. Currently, only standard euro ABCP can be issued by the program.
For the callable U.S. ABCP, Sunderland has the option to pay the ABCP in whole or in part prior to its maturity date. For the puttable ABCP, the holder has the option to require Sunderland to pay the ABCP in whole or in part prior to its maturity date. For callable/puttable ABCP, Sunderland has the option to pay, and the holder has the option to require Sunderland to pay, the ABCP prior to its maturity date. The pricing supplements will specify the option priority if both options are exercised. Principal and interest or discount (as applicable) accrues up to the call or put date only.
Program Overview
| Program details | |
|---|---|
| Program name | Sunderland Receivables S.A. |
| Program type | Multiseller. |
| Sponsor | Barclays Bank PLC. |
| Administrator | Barclays Bank PLC. |
| Maximum program limit | Not applicable. |
| Reported program-wide credit enhancement | Not applicable--fully supported. |
| Support type | Full. |
| Review type | Program-level. |
| Preference risk | Covered by program-level documents. |
| Bankruptcy-remoteness | Opinions, as applicable, were reviewed as part of Sunderland Receivables S.A.'s bankruptcy-remoteness status under Luxembourg law. |
| Rating dependent participants | |
| Liquidity providers | Barclays Bank PLC. |
| Support provider | Barclays Bank PLC. |
| Bank account provider | Barclays Bank PLC. |
| Non-rating dependent participants | |
| Administrative agent | Barclays Bank PLC. |
| Collateral trustee | Deutsche Bank Trust Co. |
| U.S. issuing and paying agent | Deutsche Bank Trust Co. |
| Euro issuing and paying agent | Deutsche Bank AG, London branch. |
Counterparty/Credit Quality
Liquidity support
Barclays Bank PLC has entered into a program liquidity facility agreement. Liquidity funds for the face amount of ABCP. Assets funded in Sunderland typically include trade receivables.
Credit support
All transactions in Sunderland are fully supported by a program liquidity facilities agreement covering all credit-related risk.
Interest rate protection
Sunderland has the ability to issue floating-rate ABCP. Any increase in the floating rate due on the ABCP is indemnified by the liquidity provider.
Foreign exchange hedging
Barclays will implement a hedging strategy on behalf of Sunderland for any mismatch between the assets and ABCP currency. Any foreign exchange shortfall risk is fully indemnified by Barclays. Assets and liquidity are generally expected to be in the same currency.
Liquidity outs and limitations
None
Legal
Sunderland is a private liability company organized under the laws of Luxembourg. We have analyzed Sunderland and found that it is consistent with S&P Global Ratings' bankruptcy-remoteness criteria.
Clawback/preference risk
ABCP investors are insulated from legal risks associated with a seller's or originator's bankruptcy. This is accomplished by program-level mechanics that have been previously reviewed by S&P Global Ratings.
Cash Flow And Payment Structure
Liability issuance tests
Barclays, on behalf of Sunderland, is not permitted to instruct the IPA, Deutsche Bank Trust Co. Americas (DBTCA), to issue ABCP unless the following conditions have been satisfied:
- Each note is either issued at a discount or is interest bearing,
- No program issuance event has occurred (as defined below),
- The ABCP tenor does not exceed the respective maximum tenors for USD-denominated (360 days) and euro ABCP (183 days), and
- The liquidity commitment equals the face amount of ABCP and any additional senior costs and interests on any program loans.
Program wind-down events
The "program issuance events" that would cause Sunderland to stop issuing the ABCP notes include:
- Sunderland becoming an investment company;
- Termination of the administration agreement;
- The insolvency of Sunderland; and
- Insufficient liquidity support.
Waterfall/payment priority
ABCP issuance tests require that sufficient liquidity commitment be in place prior to any new issuance of ABCP. Thus, liquidity pays any outstanding ABCP.
Post-default waterfall/payment priority
If Sunderland is not able to pay maturing ABCP, which constitutes a program default, the payment waterfall is as follows:
- Pay trustee fees and any advances made by DBTCA to repay ABCP notes, then
- Pay outstanding ABCP and program loan obligations (to Barclays for risk retention).
Operational Risk
Review status
Sunderland's notes are fully supported by program-level support agreements (conduit-level fully supported notes). Any amendments to the program documents will be reviewed prior to closing by S&P Global Ratings.
Administrator review
The program administrator's experience and past performance are factors in the ratings process. S&P Global Ratings conducts administrator business reviews to evaluate Barclays' ability to carry out responsibilities under the program documents, such as:
- Originating and structuring new receivables pools;
- Performing a formal credit evaluation for each new seller and the related receivables;
- Maintaining ongoing surveillance of liquidity facilities;
- Maintaining and administering the issuance and maturity of ABCP; and
- Drawing on liquidity facilities as necessary to repay ABCP holders on a timely basis.
Based on the outcome of the reviews and ongoing communications with Barclays, we are satisfied that Barclays is capable of carrying out its responsibilities under conduit's program documents.
Surveillance
The ratings of on all support providers in Sunderland are rated 'A-1' or higher. S&P Global Ratings monitors the ratings on all support providers on an ongoing basis.
Portfolio data
The program administrator has provided capacity utilization data for the portfolio as a part of S&P Global Ratings' ABCP conduit surveillance process, which is presented below in a standardized format.
Chart 2
Chart 3
Related Criteria
- General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021
- General: Global Framework For Payment Structure And Cash Flow Analysis Of Structured Finance Securities, Dec. 22, 2020
- U.S. Structured Finance Asset Isolation And Special-Purpose Entity Criteria, May 15, 2019
- Counterparty Risk Framework: Methodology And Assumptions, March 8, 2019
- ABCP: Global Methodology For Analyzing Liquidity Funding Outs And Limitations In ABCP Transactions, Oct. 27, 2014
- Global Framework For Assessing Operational Risk In Structured Finance Transactions, Oct. 9, 2014
- Global Investment Criteria For Temporary Investments In Transaction Accounts, May 31, 2012
- ABCP: Asset-Backed Commercial Paper Issued By Multiseller Conduits: Classification And Timing Of Reviews For New-Seller Transactions, April 18, 2011
- Principles Of Credit Ratings, Feb. 16, 2011
- ABCP: S&P Global Ratings' Analysis Of ABCP Ratings Following Changes To Ratings On Support Providers, Dec. 18, 2008
- ABCP: Global Asset-Backed Commercial Paper Criteria, Sept. 29, 2005
Related Research
- Global Structured Finance Scenario And Sensitivity Analysis 2016: The Effects Of The Top Five Macroeconomic Factors, Dec. 16, 2016
- Standard & Poor's Clarifies Its Approach To Requests For Rating Agency Confirmation On Structured Finance Transactions, May 18, 2012
- Assessing Credit Quality By The Weakest Link, Feb. 13, 2012
- Standard & Poor's Requests Transaction Performance Metrics From Sponsors Or Administrators Of Global ABCP Conduits, Jan. 12, 2012
This report does not constitute a rating action.
| Primary Credit Analyst: | Thomas G Dunn, New York + 1 (212) 438 1623; thomas.dunn@spglobal.com |
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