Lloyds Share News (LLOY)

The following is a press release from Moody's Investors Service: Approximately GBP 2.5 billion of debt securities rated London, 14 July 2010 -- Moody's Investors Service assigned definitive credit ratings to the following classes of notes issued by Permanent Master Issuer PLC: - Aaa to the USD 750,000,000 Series 1 Class A Notes due 2042. - Aaa to the USD 750,000,000 Series 2 Class A Notes due 2042. - Aaa to the USD 750,000,000 Series 3 Class A Notes due 2042. - Aaa to the USD 750,000,000 Series 4 Class A Notes due 2042. - Aaa to the GBP 500,000,000 Series 5 Class A Notes due 2042. Moody's also affirms the existing ratings of notes issued by Permanent Master Issuer plc, Permanent Financing (No. 3) plc, Permanent Financing (No. 4) plc, Permanent Financing (No. 5) plc, Permanent Financing (No. 6) plc, Permanent Financing (No. 7) plc, Permanent Financing (No. 8) plc and Permanent Financing (No. 9) plc. The notes are backed by a pool of prime UK residential mortgages originated by Bank of Scotland plc ("BOS", Aa3 / P-1), originated under the 'Halifax' brand. This represents the sixteenth issue out of the Permanent Master Trust structure, and the seventh using Permanent Master Issuer plc. At closing the Trust Property for this transaction consists of approximately GBP 42 billion of loans. The Reserve Fund is funded to 11.29 per cent of the total Funding 2 Notes outstanding at closing and the total credit enhancement for the Aaa rated notes is 12.99 per cent. The notes from this issuance include two features, which also appeared in series 2009-1 and 2010-1, but are not present in any other issuances of the trust: - Part of the interest coupon is payable out of the revenue waterfall as normal with the remainder payable via a dedicated yield reserve which is funded up front by BOS through a subordinated loan. - At the step-up date, in October 2013 for Class 1A, July 2015 for Class 2A, January 2016 for Class 3A, April 2016 for Class 4A and July 2016 for Class 5A, Lloyds TSB Bank plc ("Lloyds TSB", Aa3 / P-1) will offer to purchase any outstanding notes at a price of par plus accrued interest less any outstanding Aaa PDL. The likelihood of this offer occurring and the ability of Lloyds TSB to exercise it have not been assessed as part of the assigned ratings. Moody's initially analysed and will monitor this transaction using the rating methodologies for UK RMBS Master Trust transactions as described in the reports "Moody's Approach to Rating UK RMBS," published in April 2005, "Moody's Updated Methodology for Rating UK RMBS," published in November 2007, "Cash Flow Analysis in EMEA RMBS: Testing Structural Features with the MARCO Model," published in January 2006 and "Moody's RMBS Master Trust Cash Flow Analysis," published in April 2008, which are all available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. In addition, Moody's publishes a weekly summary of structured finance credit, ratings and methodologies, available to all registered users of our website, at www.moodys.com/SFQuickCheck. The key parameters used by Moody's to calibrate the loss distribution curve are a Milan Aaa CE of 11.0 % and an Expected Loss of 1.0%. Key drivers for these numbers include the current economic conditions with the UK economy only recently exiting recession and house prices falling by approximately 15% from their peak in mid-2007. As a result the pool has experienced a loss of equity in the underlying properties as indicated by the weighted-average indexed LTV of 63.62% (compared to current LTV of 61.88% based upon the valuation at last underwriting). Rising unemployment is likely to drive delinquencies up in the short to medium term. The V Score for this transaction is Low/Medium, which is in line with the score assigned for the UK Prime RMBS sector. Although in line with the V Score for other prime UK RMBS Moody's noted the unavailability of certain loan-by-loan information such as the Employment Type and the Fast Track indicator. However, this is partially mitigated by the conservative view of these characteristics assumed in the analysis and depth and quantity of historical performance data provided by the originator. V Scores are a relative assessment of the quality of available credit information and of the degree of dependence on various assumptions used in determining the rating. High variability in key assumptions could expose a rating to more likelihood of rating changes. The V Score has been assigned accordingly to the report "V Scores and Parameter Sensitivities in the Major EMEA RMBS Sectors" published in April 2009. The definitive ratings address the expected loss posed to investors by the legal final maturity of the Notes. In Moody's opinion, the structure allows for timely payment of interest and ultimate payment of principal at par on or before the final legal maturity date. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. A copy of Moody's New Issue Report for this transaction will be available on our website www.moodys.com. Alternatively, please call Moody's London Client Service desk on +44 (0)20 7772 5454, to order a copy. Copyright 2010 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. 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The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations - Corporate Governance - Director and Shareholder Affiliation Policy." Any publication into Australia of this Document is by Moody's affiliate Moody's (MORE TO FOLLOW) Dow Jones Newswires July 14, 2010 05:15 ET (09:15 GMT)