London, 07 December 2012 -- Moody's has assessed that the proposed decision not to apply any remedial action following the issuer bank account trigger breaches (resulting from the downgrade on 21 June 2012 of Citibank N.A. to P-2 from P-1) under the issuer bank account agreements linked to notes issued by Granite Mortgages 03-2 plc, Granite Mortgages 03-3 plc, Granite Mortgages 04-1 plc, Granite Mortgages 04-2 plc , Granite Mortgages 04-3 plc and Granite Master Issuer plc (the "Issuers"), will not, in and of itself at this time result in a reduction or withdrawal of the current ratings of the notes issued by the Issuers. Moody's opinion addresses only the credit impact of the proposed action, and Moody's is not expressing any opinion as to whether the action has, or could have, other non-credit related effects that may have a detrimental impact on the interests of holders and/or counterparties.
Moody's has assessed the probability and impact of a default of the issuer bank account on the ability of the Issuers to meet their obligations under the transactions. As Citibank is also the paying agent with the issuer bank accounts being limited to very small amounts of around GBP3,000 other than amounts deposited on an intra-day basis on the interest payment dates, Moody's has assessed that the decision not to move the bank account will not, in and of itself at this time result in a reduction or withdrawal of the current ratings of the notes issued by the Issuers. However as a new trigger has not been implemented in the documentation the notes are now linked to the rating of Citibank with the note ratings being at risk if Citibank is not rated at least P-3.
The principal methodology used in these ratings was Moody's Approach to Rating RMBS in Europe, Middle East, and Africa published in June 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
Moody's noted that on 2 July 2012, it released a Request for Comment, in which the rating agency has requested market feedback on potential changes to its rating implementation guidance for its approach to assessing linkage to bank accounts and eligible investments. If the revised rating implementation guidance is implemented as proposed, the rating on the Notes should not be negatively affected. Please refer to Moody's Request for Comment, entitled "The Temporary Use of Cash in Structured Finance Transactions: Eligible Investment and Bank Guidelines" for further details regarding the implications of the proposed methodology changes on Moody's ratings.
Moody's will continue to monitor the ratings. Any change in the ratings will be publicly disseminated by Moody's through appropriate media.
In addition to the information provided below please find on the ratings tab of the issuer pages at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead rating analyst and the Moody's legal entity that has issued each of the ratings.
Jonathan Livingstone Vice President - Senior Analyst Structured Finance Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Michelangelo Margaria VP - Senior Credit Officer Structured Finance Group Telephone:+39-02-9148-1100 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
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