N※N

Fitch Affirms Senior Securities Issued by Tortoise CEFs at 'AAA' and 'AA'

  //business-finance.news-articles.net/content/201 .. ities-issued-by-tortoise-cefs-at-aaa-and-aa.html
  Published in Business and Finance on Monday, December 13th 2010 at 13:35 GMT by Market Wire
          ^{🞛 This publication is a summary or evaluation of another publication}

NEW YORK--([ BUSINESS WIRE ])--Fitch Ratings has affirmed the 'AAA' ratings assigned to the senior unsecured notes and 'AA' ratings assigned to the mandatory redeemable preferred shares (MRPS) issued by the following closed-end funds managed by Tortoise Capital Advisors, LLC (Tortoise):

--Tortoise Energy Infrastructure Corporation (NYSE: TYG),

--Tortoise Energy Capital Corporation (NYSE: TYY),

--Tortoise North America Energy Corporation (NYSE: TYN)

A full rating list is shown at the end of the release.

The main drivers of the rating affirmations are sufficient asset coverage, 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 and the capabilities of Tortoise as investment advisor.

As of Oct. 31, 2010, the funds' total assets were approximately $2.4 billion, including leverage. Total leverage consisted of approximately $275 million of unsecured senior notes, $138 million of MRPS and $69.1 million of bank borrowing.

At the time of the rating affirmations, the funds' asset coverage ratio for senior notes, as calculated in accordance with the Investment Company Act of 1940 (1940 Act), was in excess of 300%, which is the minimum asset coverage required by the 1940 Act. Also, at the time of these affirmations, the funds asset coverage ratio, as calculated in accordance with the Fitch overcollateralization test per the 'AAA' rating guidelines outlined in Fitch's applicable criteria was in excess of 100%, which is the minimum asset coverage deemed consistent with an 'AAA' rating.

In addition, the funds' asset coverage ratio for total outstanding MRPS, as calculated in accordance with the Investment Company Act of 1940, was in excess of 200%, which is the minimum asset coverage level required by the 1940 Act with respect to preferred stock. The funds' pro forma asset coverage ratio, as calculated in accordance with the Fitch overcollateralization test per the 'AA' rating guidelines outlined in Fitch's applicable criteria was in excess of 100%, which is the minimum asset coverage deemed consistent with an 'AA' rating.

Should the asset coverage tests of either the senior notes or the MRPS decline below their minimum threshold amounts and are not cured in a pre-specified timeframe, the governing documents require the funds to reduce the leverage in a sufficient amount to restore compliance with the applicable asset coverage tests.

All three funds are non-diversified, closed-end management investment companies sharing a similar investment goal of obtaining a high level of total return with an emphasis on current distributions. The funds invest the majority of their portfolios in equity securities of publicly-traded MLPs and their affiliates in the energy infrastructure sector. These companies gather, transport, process, store, distribute or market natural gas, natural gas liquids, coal, crude oil, refined petroleum products or other natural resources, or explore, develop, manage or produce such commodities.

Tortoise, a wholly owned subsidiary of Tortoise Holdings, LLC, is the fund's investment adviser, responsible for the fund's overall investment strategy and its implementation. The advisor was formed in October 2002 and, as of Nov. 30, 2010, it had approximately $5.9 billion in assets under management. Montage Asset management, LLC, a wholly-owned entity of Mariner Holdings, LLC owns approximately 65% of Tortoise Holdings, LLC, with the remaining interest held by Tortoise's five managing directors and certain other senior Tortoise employees.

The rating 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.

Fitch has affirmed the following ratings:

Tortoise Energy Infrastructure Corporation (NYSE: TYG):

--$110,000,000 of series E senior unsecured notes due in April 2015 affirmed at 'AAA';

--$29,975,000 of series F senior unsecured notes due in December 2012 affirmed at 'AAA';

--$30,000,000 of series G senior unsecured notes due in December 2016 affirmed at 'AAA';

--$73,000,000 of MRPS with a liquidation preference of $10 per share due in December 2019 affirmed at 'AA'.

Tortoise Energy Capital Corporation (NYSE: TYY):

--$39,400,000 of series D senior unsecured notes due in December 2014 affirmed at 'AAA';

--$15,900,000 of series E senior unsecured notes due in June 2011 affirmed at 'AAA';

--$34,700,000 of series F senior unsecured notes due in June 2013 affirmed at 'AAA';

--$65,000,000 of MRPS with a liquidation preference of $10 per share due in November 2016 affirmed at 'AA'.

Tortoise North America Energy Corporation (NYSE: TYN):

--$15,000,000 of series B senior unsecured notes due in June 2011 affirmed at 'AAA'.

Additional information is available at '[ www.fitchratings.com ]'.

The sources of information used to assess these ratings were the public domain, and Tortoise Capital Advisors,

Applicable Criteria and Related Research:

--'Closed-End Fund Debt and Preferred Stock Rating Criteria', Aug. 17, 2009;

--'Closed-end Funds: Fitch Clarifies Criteria for Make-Whole Amounts and Other Prepayment Obligations', March 18, 2010.

Applicable Criteria and Related Research:

Closed-End Fund Debt and Preferred Stock Rating Criteria

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=462492 ]

Closed-End Funds: Fitch Clarifies Criteria for Make-Whole Amounts and Other Prepayment Obligations

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=504986 ]

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: [ HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS ]. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '[ WWW.FITCHRATINGS.COM ]'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.