Fitch Rates Jefferies' Station Place 2013-1 Notes 'BBB'; Notes Placed on
Rating Watch Negative
NEW YORK -- February 21, 2013
Fitch Ratings has assigned a rating of 'BBB' to $60 million of senior secured
notes (Notes) issued by Station Place Securitization Trust, Series 2013-1
(Trust) maturing in 2015. The notes have been placed on Rating Watch Negative.
Jefferies Mortgage Funding, LLC (JMFL), a wholly-owned subsidiary of Jefferies
Group, Inc. (Jefferies, rated 'BBB'; Rating Watch Negative' by Fitch), will
periodically sell mortgage assets to, and repurchase the same assets, from the
Trust pursuant to a master repurchase agreement. Jefferies has provided a full
and unconditional guarantee of JMFL's payment obligations to the Trust under
the repurchase agreement. The Trust has issued the Notes, which are secured by
the repo assets as well as its rights under the repurchase agreement. The
Trust's payment obligations on the Notes are not directly guaranteed by
RATING ACTION RATIONALE
The rating on the Notes is based entirely on the ratings of Jefferies. Fitch
has given no consideration to any collateral provided, as Fitch has not
evaluated, nor does it expect to review, the collateral policy or collateral
assets backing the Notes. Because Jefferies has fully and unconditionally
guaranteed the due and punctual payment of all obligations of JMFL to the
Trust under the repurchase agreement, it is Fitch's view that the Notes rank
pari passu with senior, unsecured obligations of Jefferies.
RATING DRIVERS AND SENSITIVITIES
Jefferies' ratings were placed on Rating Watch Negative on Nov. 12, 2012 in
connection with the company's planned merger with Leucadia National Corp.
(Leucadia). Fitch expects to downgrade Jefferies' ratings by one notch upon
consummation of the merger. This reflects Fitch's view that after the proposed
merger, Jefferies would become much more exposed to the market risk inherent
in the other subsidiaries' investments at Leucadia. Conversely, becoming a
privately-owned company may help insulate Jefferies from external market
pressures similar to those experienced in November 2011 For more information,
please see the press release titled 'Fitch Places Jefferies' 'BBB' L-T IDR on
Rating Watch Negative on Proposed Merger with Leucadia,' available at
Jefferies, a Delaware-incorporated holding company, is a well-established
full-service investment bank and institutional securities firm primarily
serving middle-market clients and investors. Its primary broker/dealer
operating subsidiary, Jefferies & Company, Inc., holds the vast majority of
the firm's consolidated assets and is regulated by the SEC. At Nov. 30, 2012,
Jefferies had U.S. GAAP total assets of $36.3 billion and shareholders' equity
of $3.4 billion (including non-controlling interests).
Fitch has assigned the following rating:
Station Place Securitization Trust, Series 2013-1
--$60 million senior secured notes maturing 2015 'BBB'; Rating Watch Negative.
Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);
--'Securities Firms Criteria' (Aug. 15, 2012).
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Securities Firms Criteria
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Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Ilya Ivashkov, CFA
Brian Bertsch, New York, +1 212-908-0549
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