OVERVIEW-- We have assessed the current performance of RMF Euro CDO IV by applying our 2010 counterparty criteria and conducting credit and cash flow analyses.-- Following our review, we believe that the level of credit enhancement available is commensurate with our current ratings on the notes.-- We have thus affirmed our ratings on all rated classes of notes in the transaction.-- RMF Euro CDO IV is a cash flow collateralized loan obligation (CLO) transaction that securitizes loans to primarily speculative-grade corporate firms.Standard & Poor's Ratings Services today affirmed its credit ratings on all rated classes of notes in RMF Euro CDO IV PLC.Today's rating actions follow a review of RMF Euro CDO IV, which included the application of our 2010 counterparty criteria, in addition to credit and cash flow analyses.In our opinion, the current levels of credit support available to all classes of notes are commensurate with our current ratings on the notes. We have therefore affirmed our ratings on all classes of notes in this transaction.From our analysis, we have observed that overcollateralization test results, the credit quality of the pool, and the weighted-average spread earned on the collateral pool have all improved since our last rating action in December 2009, (see Transaction Update: RMF Euro CDO IV PLC, published on Dec. 17, 2009).We have also observed that the balance of the collateral pool and outstanding balance of the class I notes have reduced. Overall, we have observed a small improvement in the level of credit enhancement available to each rated class of notes in the transaction as well as a small reduction in the stressed default rate generated by our CDO Evaluator credit model. We have also noted that the weighted-average recovery rates, which we consider to be appropriate, have reduced since our last review in 2009.We subjected the capital structure to a cash flow analysis to determine the break-even default rate for each rated class. We incorporated various cash flow stress scenarios using various default patterns, levels, and timings for each liability rating category, in conjunction with different interest stress scenarios.In our opinion, the credit enhancement available to each tranche remains consistent with the current ratings assigned to each class of notes, taking into account our credit and cash flow analyses and our 2010 counterparty criteria. We have therefore affirmed our ratings on all of the rated notes.None of the notes were constrained by the application of the largest obligor default test, a supplemental stress test we introduced in our 2009 criteria update for corporate collateralized debt obligations (CDOs) (see "Update to Global Methodologies And Assumptions For Corporate Cash Flow And Synthetic CDOs," published on Sept. 17, 2009).We have applied our 2010 counterparty criteria and, in our view, the participants in the transaction are appropriately rated to support the ratings on the notes (see "Counterparty And Supporting Obligations Methodology And Assumptions," published on Dec. 6, 2010).We will publish a transaction update on this transaction in due course.RELATED CRITERIA AND RESEARCH-- Counterparty And Supporting Obligations Update, Jan. 13, 2011-- Counterparty And Supporting Obligations Methodology And Assumptions, Dec. 6, 2010-- Update to Global Methodologies And Assumptions For Corporate Cash Flow And Synthetic CDOs, Sept. 17, 2009-- CDO Spotlight: Update to General Cash Flow Analytics Criteria For CDO Securitizations, Oct. 17, 2006RATINGS LISTRMF Euro CDO IV PLCEUR444 Million Fixed- And Floating-Rate NotesRatings AffirmedClass RatingI AA+ (sf)II A+ (sf)III BBB+ (sf)IV-A BB+ (sf)IV-B BB+ (sf)V BB (sf)
