KEY RATING DRIVERS
The affirmation follows Fitch's annual reviews of EFR and EVV and reflects:
-- Sufficient asset coverage relative to Fitch's published criteria;
-- The structural protections afforded by mandatory de-leveraging provisions in the event of asset coverage declines;
-- The legal and regulatory parameters that govern the funds' operations;
-- The capabilities of Eaton Vance Management as the investment advisor.
Fitch's ratings on AMPS speak only to timely repayment of interest and principal in accordance with the governing documents and not to potential liquidity in the secondary market.
As of the same date, EVV had total assets of approximately
The funds' asset coverage ratios for the AMPS, as calculated in accordance with the Investment Company Act of 1940 (1940 Act), were in excess of 200%, which is the minimum asset coverage required by the 1940 Act at the time of issuance and the funds' governing documents.
Should the asset coverage tests decline below their minimum threshold amounts (as tested each business day), the fund manager is then expected to cure the breach by altering the composition of the portfolio toward assets with lower discount factors (for Fitch OC Tests breaches), or by reducing leverage in a sufficient amount (for both the Fitch OC Tests and the 1940 Act test breaches) within a pre-specified time period (a maximum of 28 business days for the Fitch OC Tests and a longer period for the 1940 Act test).
EFR is a diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended that commenced operations in
EVV is a non-diversified, closed-end management investment company, registered under the Investment Company Act of 1940, as amended. The fund commenced operations in
The funds may purchase senior loans that may be fully or partially unfunded and the commitments of which the fund is obligated to fulfill at the borrower's discretion. Fitch reviewed the size of unfunded loan commitments as of
As of the same date, the funds invested in foreign currency denominated securities and utilized forward foreign currency exchange contracts to hedge the potential exchange rate risk associated with such investments. Fitch notes that for unhedged positions, exchange rate risk is included as part of Fitch's assessment of the sufficiency of asset coverage available to rated AMPS. EVV also used derivatives such as interest rate futures to manage exposure to interest rate risk.
Eaton Vance Management, a subsidiary of Eaton Vance Corp., acts as the investment adviser to the funds. As of
The ratings may be sensitive to material changes in the credit quality or market risk profiles of the funds. A material adverse deviation from Fitch guidelines for any key rating driver could cause the rating to be lowered by Fitch. For additional information about Fitch closed-end fund ratings guidelines, please review the criteria referenced below, which can be found on Fitch's website.
To receive Fitch's forthcoming research on closed-end funds please go to:
Additional information is available at 'www.fitchratings.com'.
The sources of information used to assess this rating were the public domain and Eaton Vance.
--'Rating Closed-End Fund Debt and Preferred Stock' (
Rating Closed-End Fund Debt and Preferred Stock
Source: Fitch Ratings
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