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\t\t<\/span><\/p>\n <\/span><\/p>\n \n \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":" April 4 – Fitch Ratings has affirmed Sanlam Alternative Income Fund’s (SAIF) National Fund Credit Rating at ‘AA-‘(zaf). Fitch does not maintain a National Fund Volatility Rating on the fund therefore its rating is ‘V-NR’. KEY RATING DRIVERS: The affirmation of the Fund Credit Rating is driven by the fund’s high and stable credit quality, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-9651","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=9651"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9651\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=9651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=9651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=9651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}April 4 - Fitch Ratings has affirmed Sanlam Alternative Income Fund's (SAIF)\nNational Fund Credit Rating at 'AA-'(zaf). Fitch does not maintain a National\nFund Volatility Rating on the fund therefore its rating is 'V-NR'.\t\n\t\nKEY RATING DRIVERS:\t\nThe affirmation of the Fund Credit Rating is driven by the fund's high and\nstable credit quality, as reflected by the fund's weighted average rating factor\n(WARF) and rating distribution.\t\n\t\nFitch's Fund Credit Ratings do not address any risk other than credit risk. In\nparticular, these ratings do not evaluate the impact of market risk on net asset\nvalue (NAV) variations, and therefore do not provide an indication of the\nstability of the fund's NAV. Importantly, the Fund Credit Rating does not\nreflect the liquidity of the underlying assets. In Fitch's opinion, the\nliquidity of preference shares, which account for around 80% of the fund's\ninvestments as of February 2012, may be limited in some circumstances. However,\nin Fitch's opinion, the fund's investment in liquid cash deposits or money\nmarket funds (approximately 20% of the portfolio) mitigates liquidity risk.\nFurthermore, 54% of the total portfolio can be liquidated in 90 days or less and\nthe put dates on the shares are short in some cases.\t\n\t\nASSET CREDIT QUALITY:\t\nThe weighted average credit quality of the fund is high and has remained\nrelatively stable over time, as indicated by the fund's stable WARF, which\nincorporates the put dates on the fund's preference share investments. The\nportfolio is primarily exposed to put providers in the 'AA(zaf)' rating\ncategory. A considerable portion of the fund's portfolio had a Negative Outlook\nas of March 2012, reflecting the revision of the Outlook on South Africa's\nlong-term Issuer Default Ratings to Negative in January 2012 and the resulting\nimpact on South African banks' rating Outlooks.\t\n\t\nCONCENTRATION:\t\nIn Fitch's opinion, this fund is concentrated, with the top three issuer\nexposures consistently in excess of 50% of portfolio holdings. Consistent with\nthe agency's applicable rating criteria, Fitch typically adjusts the\nWARF-implied Fund Credit Rating of funds it deems concentrated down by one or\nmore notches.\t\n\t\nThe concentrated holdings of this fund reflect the limited number of eligible\nissuers the fund can access. The fund's investment guidelines stipulate that all\ninvestments must be rated 'A-(zaf)' or better. Maximum individual issuer\nexposure is capped at 20% of the fund's assets, depending on maturity, credit\nquality and liquidity. Fitch notes that on average, the fund invests\napproximately 20% of its assets in money market funds. This provides a limited\ndiversification benefit to the fund, given that these funds and SAIF invest in a\nsubstantially similar pool of issuers.\t\n\t\nPORTFOLIO SENSITIVITY TO MARKET RISK:\t\nThe liquidity of the underlying assets is structurally constrained and therefore\nthe fund has a 'V-NR' Volatility rating. A 'V-NR' rating is assigned in certain\nilliquid markets and\/or asset classes where it may not be feasible to derive a\nVolatility rating.\t\n\t\n\t\nFUND PROFILE:\t\nSAIF is a collective investment scheme established on 25 May 2007 as an\nopen-ended rand-denominated preference share conduit fund with the objective to\nprovide liquidity and capital preservation mainly through dividend-yielding\nunderlying assets. As of February 2012, its assets under management were\napproximately ZAR7bn. It invests in plain vanilla unlisted cumulative,\nvariable-rate preference shares redeemable within three-to-five years of issue\nand in money market funds. It may also invest in assets in liquid form, as\ndefined under South Africa's Collective Investment Schemes Control Act 2002. The\nfund does not have any exposure to listed perpetual shares. The preference share\ninvestments typically have put options written by institutions rated 'A-(zaf)'\nor higher. The Fund Credit Rating has been affirmed on the basis of the agency's\nunderstanding that the put options on the preference shares held by the fund are\nunconditional, irrevocable, enforceable and expediently recoverable.\t\n\t\nFitch notes that changes to South Africa's taxation laws are being implemented,\nwhich may affect preference shares. Fitch takes comfort from the legal advice\ntaken by the fund manager with regard to the preference shares in which it\ninvests, its efforts to restructure the portfolio in a manner consistent with\nthe revised legislation, the resumption of issuance of redeemable preference\nshares in 2012 and the fund's stable investor base, including a healthy pipeline\nof new investment.\t\n\t\nTHE ADVISOR:\t\nThe fund manager is Sanlam Collective Investments (SCI) and the co-investment\nmanagers are Ora Fund Managers and Sanlam Structured Solutions (a division of\nSanlam Investment Managers). SCI was established in 1967 and is a full\nsubsidiary of Sanlam Limited ('AA-(zaf)'\/Stable). At end-December 2011, SCI's\nassets under management totalled ZAR78.6bn. The fund is regulated by the\nFinancial Services Board of South Africa and the Collective Investment Scheme\nControl Act 2002.\t\n\t\nRATING SENSITIVITY:\t\nFunds in the 'AA'(zaf) rating category are considered to have high underlying\ncredit quality. The fund's assets are expected to maintain a weighted-average\nrating of 'AA'.\t\n\t\nThe ratings assigned to the fund may be sensitive to material changes in the\nfund's credit quality. A material adverse deviation from Fitch guidelines for\nany key rating driver could cause Fitch to downgrade the ratings. Specifically,\nif the fund's average credit quality, as measured by its WARF, exceeded 1.15\n(disregarding asset maturity or put dates), the maximum level permitted in the\nfund's investment guidelines, Fitch would expect to downgrade the fund based on\ndeteriorating credit quality combined with concentration risk.\t\n\t\nThe ratings may also be sensitive to the evolving regulatory situation in South\nAfrica. Should changes to applicable regulation negatively impact the fund,\nFitch may downgrade the Fund Credit Rating in a manner consistent with the\nfund's current and prospective credit quality. Fitch is closely monitoring the\nevolving regulatory situation in South Africa and the actions taken by the fund\nmanager to comply with applicable regulation.\t\n\t\n\t\nAdditional information is available at www.fitchratings.com. The ratings above\nwere solicited by, or on behalf of, the issuer, and therefore, Fitch has been\ncompensated for the provision of the ratings.\t\n\t\nThe sources of information used to assess this rating were the public domain,\nOra Fund Managers, Sanlam Structured Solutions and SCI.\t\n\t\nApplicable criteria 'Global Bond Fund Rating Criteria', dated 16 August 2011, is\navailable at www.fitchratings.com.\t\n\t\nNote to Editors: Fitch's National ratings provide a relative measure of\ncreditworthiness for rated entities in countries with relatively low\ninternational sovereign ratings and where there is demand for such ratings. The\nbest risk within a country is rated 'AAA' and other credits are rated only\nrelative to this risk. National ratings are designed for use mainly by local\ninvestors in local markets and are signified by the addition of an identifier\nfor the country concerned, such as 'AAA(zaf)' for National ratings in South\nAfrica. Specific letter grades are not therefore internationally comparable.\t\n\t\nApplicable Criteria and Related Research:\t\nGlobal Bond Fund Rating Criteria<\/pre>\n