Reuters logo
TEXT-Fitch affirms New America High Income Fund at 'AAA'
March 1, 2012 / 8:06 PM / 6 years ago

TEXT-Fitch affirms New America High Income Fund at 'AAA'

 (The following statement was released by the rating agency)	
 March 1 - Fitch Ratings has affirmed the 'AAA' rating assigned to the
following preferred shares issued by New America High Income Fund, Inc.
 (NYSE: HYB), a closed-end fund managed by T. Rowe Price Associates, Inc.
(T. Rowe Price):	
--$85,425,000 of auction term preferred stock (ATPs), consisting of Series A, B,	
C and D, each with a liquidation preference of $25,000 per share.	
The affirmation follows Fitch's annual review of the fund. The 'AAA' ratings are	
based on sufficient asset coverage provided to the ATPs by the fund's underlying	
portfolio of assets, the structural protections afforded by mandatory cure and 	
de-leveraging provisions in the event of asset coverage declines, the legal and 	
regulatory parameters that govern the fund's operations and the capabilities of 	
T. Rowe Price as the investment manager. Fitch's ratings assigned to the ATPs 	
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 Jan. 31, 2012, the fund had assets of approximately $323 million, current 	
liabilities of $22 million and leverage of $85 million, or 28% of net assets. 	
Leverage consisted entirely of rated ATPs. 	
As of the same date, the fund's asset coverage ratios, as calculated in 	
accordance with the Fitch total and net overcollateralization tests (Fitch OC 	
tests) per the 'AAA' rating guidelines outlined in Fitch's applicable criteria, 	
were in excess of 100%, which is the minimum asset coverage amount deemed 	
consistent with an 'AAA' rating. The fund's governing documents require that 	
asset coverage for the ATPs, as calculated in accordance with the Fitch OC 	
tests, be maintained in excess of 100%. As such, should the asset coverage 	
decline below 100%, the governing documents require the fund to alter the 	
composition of its portfolio toward assets with lower discount factors, or to 	
reduce leverage in a sufficient amount to restore compliance within a 29 	
business day period.	
Additionally, as of the same date, the fund's asset coverage ratios for total 	
outstanding ATPs, as calculated in accordance with the fund's interpretation of 	
the Investment Company Act of 1940, was in excess of 200%, which is also a 	
minimum asset coverage required by the fund's governing documents.	
As of Jan. 31, 2012, the portfolio consisted mainly of U.S. dollar denominated 	
high-yield corporate securities. The fund was highly diversified by industry and	
issuer, and therefore, no additional overconcentration discount factors were 	
applied in calculating the Fitch OC tests. The fund is a diversified, closed-end	
management investment company, registered under the Investment Company Act of 	
T. Rowe Price acts as the investment advisor to the fund. As of Dec. 31, 2011, 	
T. Rowe Price had approximately $489.5 billion of assets under management. The 	
New America High Income Fund, Inc. performs all other support functions for the 	
The ratings may be sensitive to material changes in the credit quality or market	
risk profiles of the fund. 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.	
Additional information is available at ''.  The ratings 	
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has 	
been compensated for the provision of the ratings.	
The sources of information used to assess this rating were the public domain, 	
New America High Income Fund Inc., and T. Rowe Price. 	
Applicable Criteria and Related Research:	
--'Rating Closed-End Fund Debt and Preferred Stock' (Aug. 16, 2011);	
--'2012 Outlook: Closed-End Fund Leverage' (Dec. 19, 2011).	
Applicable Criteria and Related Research: 	
Rating Closed-End Fund Debt and Preferred Stock 	
2012 Outlook: Closed-End Fund Leverage	
 (New York Ratings Team)	

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below