Melbourne, Tuesday, 23 August 2016– Australia Ratings has assigned an indicative ‘A- credit rating’ to the Artesian Australian Corporate Bond Fund (the Fund).
Australia Ratings also assigned its product complexity indicator of ‘BLUE’ to the Fund’s units, indicating that an investment in the Fund represents a relatively simple financial investment.
An investment in the Fund represents a purchase of units - Standard Units and Institutional Units - in a registered managed investment scheme. The Fund’s objective is to earn a return above the RBA Cash Rate by 1.75% to 2.75% (net of the ordinary costs of the Fund as apportioned to the two classes of units).
Australia Ratings’ credit analyst, Renee Corcoran said “the ‘A-’ rating of the Fund reflects the Fund’s strong degree of protection against loss from credit
risk. The Fund’s assets are of a credit quality that supports its ability to meet redemption requests.” Ms Corcoran added “The “A-“ rating is an indicative
rating based on an indicative portfolio and the rating will be confirmed after the actual Fund is launched.”
The credit rating reflects the following key strengths of Artesian Australian Corporate Bond Fund:
- focuses on investment grade fixed and floating securities issued by Australian companies;
- at least 90% of the funds not invested in cash are invested in investment grade securities rated BBB- or higher;
- a conservative risk appetite focusing on large floating rate exposure to manage interest rate risk.
The credit rating also reflects the following key risks to the Artesian Australian Corporate Bond Fund:
- future adverse credit market conditions could affect the unit value and credit quality
- the assigned rating reflects analysis based on an indicative portfolio as the Fund has not yet been launched. If the actual launched portfolio differs materially in credit quality, the rating could change
- limited track record as it is a newly established investment scheme
The ‘BLUE’ Product Complexity Indicator of the Fund’s units is confirmed. A BLUE designation indicates that an investment in the Fund represents a relatively simple financial investment on Australia Ratings’ five point Product Complexity Indicator scale.
A full rating report is available from www.australiaratings.com/rating-reports.
Renee Corcoran, Director, Australia Ratings
Phone: 03 8080 6684