Fitch: No Rating Impact on Tenzing CFO S.A. from Reduction in Liquidity Facility

A proposed amendment to reduce the liquidity facility currently in place for Tenzing CFO S.A. (Tenzing), will not impact the ratings of the notes, according to Fitch Ratings.

Tenzing is a securitization of limited partnership interests and future commitments to private equity funds, which is managed by Vedanta Capital (Vedanta).

Vedanta has notified Fitch of its intention of executing a partial cancellation that would reduce the liquidity facility in an effort to improve overall fund economics. The proposed modification would reduce the facility by approximately 50 percent, from $48.4 million to $24.4 million.

In Fitch's opinion, a reduction in the facility size will benefit noteholders by decreasing costs. Tenzing currently has a low level of undrawn commitments with decreased likelihood of being drawn, an increasing rate of distributions, and high coverage ratios as a result of the recent debt amortizations. In addition, reserve ratios are fully in compliance.

LIQUIDITY PROFILE

According to the Sept. 23, quarterly trustee report, Tenzing's unfunded commitment exposure was reduced by $4.5 million from the prior period to an outstanding balance of $17.1 million. This amount would be covered by cash / liquid investments of $17.8 million in various reserve and short-term liquidity accounts, and the proposed $24.4 million liquidity facility amount. The liquidity facility expires on the December 2018, the maturity date of the notes, and is renewed on a yearly basis, subject to certain terms, such as adequate asset coverage. Amounts may be borrowed under the facility to fund the payment of senior expenses or fund capital calls. Tenzing has not drawn on the liquidity facility as of this release.

ASSET COVERAGE RATIOS

Between June 22, 2012 and Sept. 23, asset coverage tests for all four outstanding liability tranches have passed with increasing cushion, reflecting an overall increase in net asset value for the fund during the period. During the period, class B coverage increased to 6.22 times (x) from 2.58x, class C coverage increased to 3.47x from 1.95x, class D coverage increased to 2.69x from 1.68x. Asset coverage tests insure timely payment of interest on the rated notes. The improvement in asset coverage is attributed primarily through full amortization of the class A notes during the period.

TRANSACTION PROFILE

Tenzing is a securitization of existing limited partnership interests and new commitments to private equity funds. The transaction entered its amortization period in December 2010 and does not currently have the ability to enter into new commitments.

INVESTMENT ADVISER

Tenzing is managed by Vedanta Capital (Vedanta). Headquartered in New York, NY, Vedanta was established in 2006 as a private equity specialist firm focused on technology-based investments. As of June 30, 2012 Vedanta managed approximately $600 million in total commitments and employed 12 professionals.

Fitch is not a party to the transaction and therefore does not provide consent or approval to changes in its terms, as that remains the sole preserve of the transaction parties. Fitch expects to be notified by the trustee when or if the proposed amendments are executed either in part or in their entirety.

Additional information is available at 'fitchratings.com'.

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