Melbourne, Tuesday, 23 May 2017 – Australia Ratings affirmed its ‘A-‘ credit rating to the Artesian Corporate Bond Fund (the Fund) Class A and B units, following several changes to the Fund’s terms and administrative arrangements.
Australia Ratings also confirmed its product complexity indicator of ‘BLUE’ to the Fund’s units, indicating that an investment in the Fund represents a relatively simple financial investment.
An investment in the Fund represents a purchase of units in a registered managed investment scheme. The Fund’s objective is to earn a return above the RBA Cash Rate plus 2.75% (net of the ordinary costs of the Fund as apportioned to the two classes of units).
The ‘A-‘ rating reflects the Fund’s strong degree of protection against loss from credit risk. The Fund’s assets are of a credit quality that supports its ability to meet redemption requests. The ‘A-‘ rating also reflects the planned direction of the credit quality of the portfolio as funds under management grow and the Fund reaches its critical threshold.
The credit rating reflects the following key strengths of Artesian Corporate Bond Fund:
- focuses on investment grade fixed and floating securities issued by Australian companies or registered foreign companies.;
- at least 90% of the funds will be invested in investment grade securities rated BBB- or higher;
- a conservative risk appetite focusing on large floating rate exposure to manage interest rate risk.
The credit rating also reflects the following key risks to the Artesian Corporate Bond Fund:
- future adverse credit market conditions could affect the unit value and credit quality of the portfolio
- the Fund currently has a concentrated portfolio and small investor base
- the rating reflects analysis based on the Fund’s Investment Management Agreement which permits certain exceptions while the funds under management reaches a critical threshold
A full rating report is available from www.australiaratings.com/rating-reports.
For more information contact:
Chris Dalton, Managing Director
0403 584 600
03 8080 6684
About Australia Ratings Australia Ratings is Australia’s local credit rating agency with over 55 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138. Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.