Standard & Poors - Royalty Pharma Finance Trust

New York, NY (US) – August 1, 2003 — Standard & Poor’s–Standard & Poor’s Ratings Services today assigned its ‘AAA’ rating to the $225 million variable funding notes issued by Royalty Pharma Finance Trust.

 

The rating is based on the insurance policy provided by MBIA Insurance Corp. (MBIA; ‘AAA’ insurer financial enhancement rating), the historical sales strength of the underlying royalty assets, the diversity of the portfolio, and certain enhancements included in the transaction structure. MBIA’s insurance policy guarantees timely payment of interest and ultimate payment of principal.

 

The notes are supported by the cash flows generated by a pool of 13 different royalty interest and rights payment agreements. The majority of the royalty assets included in the pool represent biologic pharmaceutical products targeting life-threatening diseases.

 

This is the second pharmaceutical royalty transaction rated by Standard & Poor’s. The transaction structure includes a three-year revolving period and a seven-year scheduled maturity. Initial advances at closing total approximately $190 million.

 

The major risks associated with the transaction include the potential withdrawal of FDA approval for one or more of the various drugs, changes to health care reimbursement policies, potential pricing pressures, marketing and distribution capabilities of various manufacturers, and the potential introduction of new, alternative drug treatments.

 

The transaction was structured and arranged by Credit Suisse First Boston.

 

Copyright 2003, Standard & Poor’s Ratings Services

 

Contacts
Standard & Poor’s, New York
C Eric Hedman, CFA, 212-438-2482
David M Zuber, 212-438-1125
Arthur Wong, 212-438-7870
Sabine Zerarka, Esq., 212-438-6610