Press Release|Public Finance

KBRA Affirms BBB Rating with Stable Outlook for Matching Fund Special Purpose Securitization Corporation (U.S. Virgin Islands) Matching Fund Securitization Bonds Series 2022A and Series 2022B

12 Apr 2024   |   New York


KBRA affirms the long-term rating of BBB with a Stable Outlook for the Matching Fund Special Purpose Securitization Corporation Matching Fund Securitization Bonds Series 2022A and Series 2022B.

Key Credit Considerations

The rating was affirmed because of the following key credit considerations:

Credit Positives

  • The bonds are provided ample coverage by the Matching Fund Receipts of about 2.20X MADS, although pledged revenues may exhibit volatility.
  • The combination of the Act, the bankruptcy remoteness of the Corporation, the Sale Agreement, and the Indenture provide the Bonds with a strong legal framework that KBRA believes will substantially insulate the pledged Matching Fund Receipts and the Corporation from the credit risk of the Virgin Islands.
  • The ABT of 3.0x prevents the Corporation from diluting the cushion provided by the pledged revenues.
  • The U.S. Treasury is expected to deposit the full amount of budgeted Matching Fund Receipts in a restricted account with the Trustee prior to the start of each fiscal year.

Credit Challenges

  • Pledged revenues are subject to declines due to changing U.S. consumer preferences for rum and/or the failure of one or more of the rum producers.
  • The pledged revenues are not broad and diversified. They consist of rum sales only from two rum companies based in the Virgin Islands to U.S. consumers.
  • Further, unlike the pledged Matching Funds, the ongoing payments to the rum companies funded from the Government’s Residual Certificate receipts are not bankruptcy remote introducing the risk that payments could be interrupted or delayed.

Rating Sensitivities

For Upgrade

  • The addition of incremental revenue streams to broaden and diversify the pledged revenues.

For Downgrade

  • A significant decline in pledged Matching Fund revenues.

To access rating and relevant documents, click here.



A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1003919

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