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How your iPhone can help keep your financial world in check

Unfortunately, identity theft is often treated more like a natural disaster that cannot be prevented, than it is as a criminal act perpetrated by an individual; it is all about preparing for the inevitable and the cleanup that takes place after it happens. The villain is often times identified as the organization that allowed such an event to happen, sort of like blaming the weatherman for bad weather. As such, organizations are required to equip you with the tools necessary to clean up and defend your identity rather than help you find the individual that is attacking you.

But when you get right down to it, you are the only one that can protect your own information. And simply balancing your checkbook once a month is not enough to ensure that your financial identity is secure. It all begins with understanding how consumer reporting agencies financial institutions and creditors see you as a consumer. You need to take the time necessary to make sure that they all know you as the consumer you think you are.

Keeping track of your various credit reports

Close accounts and update information  Staying on top of your current financial status is important. Especially when it comes time for you to track down and prove that the accounts you know you have are the only accounts that should currently be listed as active. This will make tracking down fraudulent activity a much easier task.

Old addresses, unused credit card accounts, paid off loans and closed bank accounts can remain on your credit history for years. The big three credit reporting agencies that you will want to keep as up to date as possible are Experian, Equifax and TransUnion. Through each you can request a credit report to review and even dispute reported items that you feel are out of date, inaccurate, or possibly fraudulent. You will then need to follow-up with individual companies you once did business with to ensure that they each are accurately reporting your past accounts as being paid in full.

However, there is a limit to how many free copies of your credit report you can request each year. This will depend on how many legitimate disputes you have with each credit reporting agency. With each dispute, you can potentially get an updated report to prove that what you disputed has been set to rights. Each of the three services mentioned above that can help you clean up your credit report also have monthly subscription services. These services, which can cost anywhere from $15 to $30 monthly, allow you to access reported activity on an ongoing basis. Experian (Free Universal), Equifax (Free Universal) TransUnion (Free iPhone) each have mobile apps that when used in conjunction with their premium services, can be used to alert you when new accounts are created using your financial information. After you have all of your information in order, keeping it in order is a whole lot easier when using such a service.

Keep track of your existing accounts and balances

Tracking account balances  Another aspect of your financial identity comes in the form of maintaining the open accounts you do have. It can become a challenge to stay on top of all of your various checking, investment, and credit accounts on a day-to-day basis. That is where apps like iBank ($9.99 iPhone, $19.99 iPad) and Intuit’s Mint (Free Universal) can help. With each service you will be able to store the credentials necessary to access each of your accounts online. Once this is done, you can use their respective apps to log on to all of your accounts at the same time and get a report of what each accounts balance is. Noticing that your cash accounts are not as high as you thought they should be, or that your credit balances are not as low as you thought they should be, can help identify when someone has gained access to one of your accounts.

Direct account access and alerts  There are times when what you need is access to your account directly through the managing institution. Most financial institutions, banks and credit card companies now have their own mobile apps that allow you to access your accounts directly. These apps can be used for more than just paying your bills and depositing photos of your checks. The benefit to using such an app directly is that you can usually set up notifications with many of these apps that can assist you when it comes to monitoring your accounts. Discover is one such app (Free Universal) that you can use to set up alerts whenever there is a cash advance, a transaction occurs outside the US, there is a purchase in excess of an amount you set, or any time that Discover notices an activity on your account that is unusual.

Secure access with strong passwords

Choosing Strong Passwords  As you start to monitor your credit reports and financial accounts more frequently, it is equally as important to tend to your password “garden” as well. It is always a good practice to use what is known as a strong password with each of your online accounts, and especially where your finances are concerned, choosing a different, strong password with each account is essential. The Wolfram Password Generator ($0.99 Universal) is a good first place to start when it comes to evaluating how strong your chosen password actually is. With it you can measure exactly how strong each of your passwords are. The strength of a password is generally measured by how long if would take for a computer to enumerate through enough passwords in an effort to “guess” what your password is. Even the strongest of passwords are no good if someone knows what your password is.

Managing and Changing Passwords  Preventing others from accessing all of your passwords in as secure a manner as possible is the primary function of password managers. They work by keeping all of your passwords secure behind one master password. While keychain managers like iOS 8’s keychain can certainly remember your passwords, managing them is another matter entirely. Your collection of passwords should be though of more like a garden that needs to be tended to from time to time rather than just a collection of assets you need to lock away for long periods of time.

The Department of Defense recommends that passwords never be used for longer then one year, a frequency that universities like MIT also endorse. Password management apps like LastPass (Free Universal) can perform an audit of all of your passwords to see how often you repeat the same password and even test the strength of all of your existing passwords. LastPass even has the ability to auto-update your passwords for you.  This can certainly save time, and ensure that you the weeds out of your passwords.

Chinese credit data prompt more calls for monetary easing

The Peoples Bank of China headquarters in Beijing. The Chinese central bank has pledged to maintain a prudent monetary stance, but that may be getting harder to do as fairly weak credit data in January and a slowing economy prompt calls for more credit easing to spur growth.

Dow Jones
Beijing
Chinas central bank has pledged to maintain a prudent monetary stance, but that may be getting harder to do as fairly weak credit data in January and a slowing economy prompt calls for more credit easing to spur growth.
Analysts said that the central banks tight grip on so-called shadow banking just as capital is flowing out of the country have left the worlds second largest economy short of the credit it needs.
On Friday, the Peoples Bank of China reported a rise in new bank loans in the economy. But overall credit as measured by what is called total social financing was weak compared with a year ago. The growth in broad money supply for the month was also at a record low and well below expectations.
Todays data suggest that current monetary policy is not easing, said Ma Xiaoping, economist at HSBC, suggesting more monetary easing is needed.
New yuan bank loans by Chinese banks were 1.47tn yuan ($237.1bn) in January, up from 697.3bn yuan in December. Bank lending held in check by the governments annual quotas traditionally gets off to a fast start to the year as banks compete for good projects.
Total social financing, a broader measurement of credit in the economy that includes nonbank lending, came to 2.05tn yuan in January, up from 1.69tn yuan in December but well below the 2.6tn yuan of January 2014.
Economists said that non-bank financing known as shadow banking was roughly one-third its level in January 2014. That reflects ongoing efforts to put the squeeze on shadow banking, some of which is seen as loans to riskier parts of the economy. Were seeing looser bank lending but a tightening on shadow banking, said Mark Williams, economist with Capital Economics. I think policy makers are still focused on reining in overall credit, he added.
The reining in of non-bank credit comes at a time when the economy is struggling. Chinas economic growth slowed to 7.4% last year, the slowest pace in nearly a quarter of a century.
Trade data has been disappointing and inflation slipped to a five-year low in January. Analysts are openly talking of possible deflation.
Chinas central bank cut interest rates in November. This month it allowed banks to lend more by reducing the proportion of deposits they have to keep with the central bank trimming what is called the reserve requirement ratio.
Analysts have said that data at this time of the year just ahead of the Chinese Lunar New Year holiday is often distorted. But they also said the central bank needs to be more flexible and that more monetary easing measures may be needed.
A cut in banks reserve requirement ratio is not enough to support the cooling economic growth, said ANZ economist Zhou Hao. The central bank may need another cut in either interest rates or banks reserve requirement ratio in the first quarter.
Chinas broadest measure of money supply, M2, expanded 10.8% at the end of January compared with a year earlier. This was the lowest level on record and compared with a 12.2% rise seen at the end of December.
In recent months, the central bank has also had to grapple with growing strains as more Chinese and foreign companies move money overseas, amid less positive expectations for the economys performance this year. China had net capital outflows of $91bn in the fourth quarter of 2014.

Company Shares of Encore Capital Group, Inc. Rally 3.79%

Encore Capital Group, Inc. (Encore) is engaged in consumer debt buying and recovery. Encore purchases portfolios of defaulted consumer receivables at deep discounts to face value and use a variety of operational channels to maximize its collections from these portfolios. Defaulted receivables are consumers unpaid financial commitments to credit originators, including banks, credit unions, consumer finance companies, commercial retailers, auto finance companies, and telecommunication companies, and may also include receivables subject to bankruptcy proceedings, or consumer bankruptcy receivables. In February 2014, the Companys subsidiary Cabot Credit Management acquired Marlin Financial Group. In February 2014, Encore Capital Group Inc announced that it has acquired a 51% interest in Refinancia, a debt purchaser in Colombia and Peru. In April 2014, Encore Capital Group Inc acquired a controlling stake in Grove Capital Management (Grove).

The vehicle tracking industry

Many industries in South Africa are governed by Regulatory bodies; from estate agents to banks, insurance to cash loans and so the list continues. The question is – is the vehicle tracking industry regulated?

The following two incidents need mentioning to explain my frustration (involving two different tracking companies):

A vehicle got stolen and tracking company nr 1 was called WITHIN 2 MINUTES of the incident, (with phone records and CCTV footage as proof), still they were unable to track the vehicle.

In another stolen vehicle incident, tracking company nr 2 was unable to locate the device as it was not in working order. And the outcome – the insurance broker had to reimburse the client for his loss as he did not disclose material facts beforehand, in other words he did not tell the client to have the system checked every 6 months as per the policy conditions.

Now my question is: do tracking companies have no responsibilities towards their clients? They receive the subscription fee every month, in return the client expects to receive the service they are paying for. If a device is no longer in working order, shouldntthe service providerinform the client? Or is it ok to keep receiving fees without providing a service? If the theft of a vehicle has been reported within 2 minutes of the incident, is it unrealistic to expect the tracking company to at least be able to indicate where the vehicle is, let alone recover it?

And the worst of all is that the tracking companies in these incidents got away without as much as a slap on the wrist.I feel it is unacceptable that the clients and / or insurance companies are the only ones paying the price and the tracking industry just keeps on going and growing!

I would love to see some statistics; real, up to date audited ones, not the vague percentages that are thrown around, for example In excess of 90% recovery rate, some even 95% or better still; 98.11%. I havetried to obtain statistics froma couple ofinsurance companies, only to be told it is not available. Now this is beyond me; they dont have statistics available to proof the success rate, yet they insist on having these devices installed in some (most?) cases.

If the industry is indeed regulated,I would appreciate some information.

How Well Do You Know Your Spouse’s Financial Habits?

Play along with another episode of Money Match, the game show in which married couples find out just how in sync they are with their finances.

Why medical debt is the most dangerous kind

Depending on their income, debtors can file for liquidation of debts underChapter 7, or repayment of part of their debts over time underChapter 13.

The bankruptcy will stay as a negative reference on their credit report for up to ten years, and it can disqualify a person from jobs and make it harder to rent property. Bankruptcy filers will pay substantially higher interest rates for credit for years.

How can we tell that medical debt is a factor in bankruptcy?

To find out what role medical debt plays in causing consumer bankruptcy, I generated two sets of data. First, I analyzed bankruptcy schedules filed by debtors in 500 randomly selected bankruptcy cases during 2013. Bankruptcy schedules are the standardized forms on which debtors report income, expenses, assets, liabilities and other financial data. Then I looked at results from a nationwide survey of debtors.

Bankruptcy schedules disclose medical debt owed to physicians, hospitals, labs, pharmacies, medical credit providers and other medical-related expenses. Additionally, prior studies have shown that approximately 23% of credit card charges are for medical bills. So, for each debtor I added the total reported medical expenses plus 23% of the outstanding credit card balance to determine the total amount of medical debt.

The data revealed that 61% of all debtors carry medical debt and that the average medical debt per debtor in 2013 was $9,374. Debtors in my sample also reported an average of $55,967 in unsecured debt and annual income of $40,920. Of these, a total of 18% of debtors had medical debt that was greater than half of their total unsecured debt or half of their annual income.

One of the key reasons that people file for bankruptcy is to discharge unsecured debt. If medical bills make up more than half of a persons unsecured debt or is greater than half of their income, then medical debt is probably a major factor in causing the person to file bankruptcy.

Around 18% of debtors in my sample had medical debt greater than half of their total unsecured debt or annual income, so we can conclude that medical debt was the predominant factor in 18% of the bankruptcies in my sample.

Why do people decide to file for bankruptcy?

Along with my analysis of debtor schedules, I conducted a nationwide survey of people who filed for bankruptcy in 2013.

The survey asked debtors what caused them to file bankruptcy and then listed standard reasons such as loss of income, illness and others (including reason not listed here). Out of 446 responses, medical debt was given as the single biggest cause of bankruptcy, with 21% of respondents answering strongly agree, and a combined 26% of respondents answering strongly agree or somewhat strongly agree that they filed because of medical bills. Incidentally, job loss was given as the second highest single cause, with 19% of debtors answering strongly agree, and 20% answering either strongly agree or somewhat strongly agree.

So consumer debtors themselves attribute their bankruptcies to medical debt at rates relatively similar to those I determined by analyzing financial data on bankruptcy schedules. Using two types of data, we have a credible picture that medical debt is the predominant factor in 18% to 26% of consumer bankruptcies.

Why is understanding medical debt important?

In contrast to many other types of consumer debt, debtors usually dont choose to incur medical expenses and they have even less control over the amount.

And there is no standard system for when medical providers turn unpaid bills over to a third party for collection or report the debt to credit reporting agencies. Some may wait only 30 days before sending unpaid bills to a third party collector others may wait up to 180 days, according to theConsumer Financial Protection Bureau. Recently the Obama administration enactednew rulesto protect low-income patients from aggressive debt collection practices from nonprofit hospitals, including reporting unpaid debt to collection agencies and credit reporting bureaus, suing patients and garnishing their wages.

Moreover, whether or not a person has medical insurance is unrelated to whether the person needs medical care. For this reason, the Fair Isaac Corp (FICO), which calculates credit scores, now weighs medical debt differently whencalculating credit scores. They recognize that medical spending is seldom discretionary.

This post originally appeared at The Conversation. Follow @US_Conversation on Twitter. We welcome your comments at ideas@qz.com.

Online financial program helps students manage money

GENESEE COUNTY, MI – A financial literacy program called Banzai is making its way into the curriculum of schools around Genesee County.

Dort Federal Credit Union started sponsoring the program in 2013, and it is now available for free to 91 schools in Genesee County.

Morgan Vandagriff, 37, of Provo, Utah, cofounded Banzai shortly before the financial crisis of 2008. Vandagriff, who worked in private wealth management, said he was astonished by the overall lack of financial knowledge.

The goal of Banzai is to give students the choice to make good choices, to give them a fighting chance to have a finance-literate life, he said.

The online program helps students manage finances by taking them through a series of real-life scenarios and tasking them with making money-related decisions. They are given a glimpse of what to expect entering the workforce and advised how to balance checkbooks, save money, manage debt and make big purchase decisions.

Vandagriff said the program was designed for 13- to 18-year-olds. The amount of time Banzai takes to complete depends on a students financial literacy. It is possible, he said, for some high school seniors to finish it in one sitting.

Weve received positive feedback on Banzai, he said. A lot of kids say they wish their parents had gone through the program.

JaQuetta Moore, a business teacher at Carman-Ainsworth High School, started using the program in her four finance classes at the beginning of the school year. The response from students, teachers and parents has been positive, she said.

It connects the classroom with the real world, Moore said. It leaves students with an understanding of finances that is much-needed nowadays.

Moore said 124 of her students, all seniors, have so far used Banzai during class and on their own at home.

It gives them a visual and makes them think, so that they gain knowledge of dealing with money and avoid being cheated, too, Moore said.

About 70 teachers in Genesee County, and more than 14,000 teachers nationwide, use the program, said Rachel Yentes, who works with Banzai public relations. It is also available to seven schools in Lapeer County and two in Shiawassee County.

Many teachers in the Flint area, Yentes said, may not know they have this resource available for free.

I plan to incorporate the program into my classes every year, Moore said.

Fitch Downgrades Bombardier’s IDR to ‘B+'; Outlook Negative

CHICAGO–(BUSINESS WIRE)–Fitch Ratings has downgraded Bombardier Inc.s (BBD) Issuer Default
Rating (IDR) to B+ from BB-. Fitch has also downgraded BBDs
long-term debt and bank facility ratings to B+/RR4 from BB-/RR4.
The Rating Outlook is Negative. A full list of rating actions follows at
the end of this release.

The Recovery Rating (RR) of 4 for BBDs senior unsecured debt and bank
credit facility supports a rating of B+ and reflects expectations of
average recovery prospects (31 – 50%) in a distressed scenario. It is
based on Fitchs going-concern analysis of BBD that incorporates the
companys established market positions and solid backlogs at both BA and
BT. The recovery analysis also incorporates an expected $1.5 billion
debt issuance which BBD has publicly discussed recently. Fitchs
analysis treats this planned issuance as unsecured debt. The RR 6 for
subordinated convertible debt and preferred stock reflects a low
priority position relative to BBDs debt.

KEY RATING DRIVERS

The rating downgrade reflects the expected impact on BBDs credit
metrics from negative free cash flow (FCF) and the companys planned
debt issuance. FCF was significantly more negative than expected in 2014
and, based on BBDs planned capital spending and segment cash flow,
Fitch believes FCF could be negative $900 million – $1 billion or more
in 2015.

The Negative Rating Outlook incorporates execution risks for the
CSeries, margin pressure at BA and BT, liquidity risks if BBD does not
meet its target for raising capital, and uncertainty about the impact of
potential actions by BBD related to its announcement last week that it
would explore ways to participate in industry consolidation in order to
reduce debt. Fitch assumes the new debt planned by BBD will be
unsecured, but there could be concerns about the priority of existing
senior unsecured notes if the new debt is secured or is issued at the
operating level by a BBD subsidiary.

Negative FCF reflects BBDs capital spending plans of approximately $2
billion in 2015 which is not declining as soon as anticipated, largely
due to delays on the CSeries, but which also includes increasing
spending for the Global 7000 and 8000 business jets. A key rating driver
will be the level of capital spending and future improvement in FCF
which Fitch believes could remain substantially negative through the
next two or three years.

Excluding the impact of BBDs capital raising plans, Fitch believes cash
balances and liquidity would be adequate through the current year but
could become a larger concern in 2016. The companys planned debt
issuance of up to $1.5 billion and its estimated share issuance of $600
million would provide a substantial liquidity cushion until development
spending declines. Besides capital expenditures, BBD has approximately
$750 million of debt scheduled to mature in January 2016, and it
estimates pension contributions at $320 million in 2015.

Key rating concerns include CSeries development costs and entry into
service (EIS) for the CS100 which BBD estimates will occur in the second
half of 2015 following a significant engine-related delay in 2014. Fitch
views BBDs estimated EIS window for the CSeries as challenging given
the amount of new technology involved in the aircraft. There are
currently 243 firm orders from approximately 15 customers – a relatively
low level compared to other aircraft programs such as the Airbus 320neo
and Boeing 737 MAX aircraft families which compete for at least a
portion of the CSeries potential customer base.

New net debt issuance would increase BBDs already high leverage. Fitch
calculates debt/EBITDA was 6.1x at the end of 2014, and could increase
above 7x depending on the amount of new debt. In addition, weak
financial results increase the risk of a covenant breach under BBDs
bank facilities, although covenants were in compliance at the end of
2014 and Fitch expects any necessary adjustment to the bank facilities
would be an integral part of BBDs capital raising plans.

Low margins at BA and BT contribute to BBDs weak credit metrics. BAs
margins before special items have recently been negatively affected by
pricing pressure on new aircraft and reduced values on used aircraft.
BAs margins will also be reduced by normal costs associated with the
eventual ramp up of production on the CSeries and Global business jet
programs. At BT, margins reflect execution challenges at BT on certain
large projects as well as competitive pricing across the industry.

BBD initiated significant restructuring programs in both segments during
2014 and has estimated it would realize annual savings of $200 million
at BA and $68 million at BT when completed. However, achieving these
expected benefits could be slow.

BBDs liquidity at Dec. 31, 2014 included cash of nearly $2.5 billion
and approximately $1.4 billion of availability under bank facilities. In
addition to a $750 million bank revolver available to BBD and BA that
matures in 2017, BT has a separate EUR500 million revolver that matures
in March 2016. Both facilities were unused. BA and BT also have letter
of credit (LC) facilities that are used to support performance risk and
secure advance payments from customers.

The bank facilities contain various leverage and liquidity requirements
for both BA and BT, which remained in compliance at Dec. 31, 2014.
Minimum required liquidity at the end of each quarter is $500 million at
BA and EUR600 million at BT. BBD does not publicly disclose required
levels for other covenants. The lowest levels of covenant compliance
typically come within the year instead of at year-end because of BBDs
cash flow profile.

Rating concerns are mitigated by BBDs diversification and market
positions in the aerospace and transportation businesses and BAs
portfolio of commercial aircraft and large business jets. The company
has continued to refresh its aircraft portfolio which should position it
to remain competitive. The Global 7000 and 8000 aircraft are well
positioned to take advantage of solid demand for large business jets and
are scheduled for entry into service in 2016 and 2017, respectively.
BBDs consolidated revenues (excluding currency impact) rose 10.8% to
$20.1 billion in 2014, and the companys order backlog totaled $69.1
billion, or more than three times annual sales.

KEY ASSUMPTIONS

Fitchs key assumptions within our rating case for the issuer include:

–Negative FCF of $900 million – $1,000 million or more in 2015.

–Equity and unsecured debt issuance during 2015 provide a substantial
cash cushion to offset significant negative FCF through 2017.

–Gradual improvement in segment margins at BA and BT from restructuring
is partly offset by normal margin dilution at BA related to
entry-into-service of new aircraft.

–CSeries entry-into-service occurs in the last half of 2015.

–Financial covenants remain in compliance.

–Aerospace deliveries in 2015 are close to, or above, 210 business jets
and 80 commercial aircraft expected by BBD.

RATING SENSITIVITIES

Future developments that may, individually or collectively, lead to a
rating downgrade include:

–BBDs planned issuance of equity and debt of up to roughly $2 billion
would boost cash to a level that removes liquidity as a near term
concern through the next two years. In the event that the amount of
capital raised is significantly less than planned, or if cash deployment
is larger, liquidity could become a concern sooner. Fitch would view
liquidity as a concern if cash balances fall materially below $2 billion
for longer than one or two quarters.

–Inability by BBD to rebuild FCF at a pace that recovers to a
break-even level by 2018. Fitch expects little improvement in FCF in
2015, and possibly in 2016, compared to negative $1 billion in 2014
(excluding the impact of changes in factored receivables). FCF may not
become positive before 2018.

–The CSeries is delayed again or there are significant order
cancellations.

–Restructuring initiated in 2014 fails to address execution issues at
BT or fails to generate improved margins at BA, adjusted for the impact
of dilution from entry-into-service of new aircraft.

The rating outlook could be changed to stable if BBDs capital spending
and operating results indicate FCF will approach a breakeven level by
2018. Other developments that could support a stable rating outlook
include clear progress toward higher segment operating margins,
entry-into-service as planned for the CSeries, solid order rates for
business and regional aircraft, and strategic actions which reduce
leverage.

Fitch has downgraded BBDs ratings as follows:

–IDR to B+ from BB-;

–Senior unsecured bank revolver to B+/RR4 from BB-/RR4;

–Senior unsecured debt to B+/RR4 from BB-/RR4;

–Preferred stock to B-/RR6 from B/RR6.

The Rating Outlook is Negative.

BBDs debt at Dec. 31, 2014, as calculated by Fitch, totaled
approximately $7.8 billion. The amount includes sale and leaseback
obligations and is adjusted for $347 million of preferred stock which
Fitch gives 50% equity interest. The debt amount excludes adjustments
for interest swaps reported in long-term debt as the adjustments are
expected to be reversed over time.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

–Corporate Rating Methodology (May 2014);

–Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT
Credit Analysis (November 2014);

–Recovery Ratings and Notching Criteria for Non-Financial Corporate
Issuers (November 2014);

–Bombardier Inc. – Ratings Navigator (December 2014).

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=979968

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 AGENCYS PUBLIC WEBSITE WWW.FITCHRATINGS.COM.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCHS 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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE
RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.

Moody’s confirms Reynolds Group Holdings Limited’s B3 CFR; outlook stable

Approximately $18 billion of rated debt affected

New York, February 19, 2015 — Moodys Investors Service (Moodys) confirmed the B3 corporate family
rating, B3-PD probability of default rating and other instrument
ratings of Reynolds Group Holdings Limited (RGHL) and its subsidiaries.
The rating outlook is stable. The confirmation follows RGHLs announcement
that it plans to use 100% of the proceeds from the pending sale
of the SIG division for debt reduction. This concludes the review
for downgrade initiated on November 25, 2014.

On February 17, 2015, RGHL announced the commencement of offers
to purchase senior secured notes and senior unsecured notes with the proceeds
from the sale of the SIG division. The amount of cash proceeds
(net of certain adjustments described in the indentures governing the
notes) to be received at the closing of the SIG disposition is currently
estimated to be $4.15 billion. The company intends
to publicly disclose the precise amount of the proceeds at least 6 business
days prior to the closing of the SIG disposition. In addition,
RGHL is concurrently seeking an amendment to the term loan facility credit
agreement to allow the company to use the asset sale proceeds to pay down
higher coupon notes rather than term loans.

Moodys confirmed the following ratings:

Reynolds Group Holdings Limited

– B3 corporate family rating

– B3-PD probability of default rating

Reynolds Group Holdings Inc.

-All senior secured facilities, B1 (LGD2)

Beverage Packaging Holdings (Luxembourg) II SA,
(Co-Issued by Beverage Packaging Holdings II Issuer Inc.
(USA))

-All senior unsecured notes, Caa2 (LGD5)

-All senior subordinated notes, Caa2 (LGD6)

Reynolds Group Issuer Inc., (Co-Issued by Reynolds
Group Issuer LLC, Reynolds Group Issuer (Luxembourg) SA)

-All senior secured notes, B1 (LGD2)

-All senior unsecured notes, Caa2 (LGD5)

Pactiv Corporation

-All senior unsecured notes, Caa2 (LGD6)

The outlook is stable.

RATINGS RATIONALE

The confirmation of RGHL and its subsidiaries ratings reflects managements
pledge to use 100% of the proceeds from the pending sale of the
SIG division for debt reduction. While leverage is expected to
remain above 7.0 times over the near-term, RGHL is
expected to continue to improve its operating performance, pay down
debt and improve credit metrics. Additionally, the company
is expected to continue to maintain good liquidity. Free cash flow
to debt is also expected to improve at least slightly following the completion
of the tender offer. Specific instrument ratings may change depending
upon which debt the company repays.

The B3 corporate family rating reflects RGHLs weak credit metrics,
lengthy raw material cost pass-through provisions and the concentration
of sales. The rating also reflect the companys acquisitiveness
and financial aggressiveness. The company has a complex capital
and organizational structure and limited transparency into its various
segments. RGHL operates in a fragmented and competitive industry
and has a significant percentage of commodity products. The company
is owned by a single individual-financier Graeme Hart.

Strengths in the companys profile include its strong brands and market
positions in certain segments, scale and high percentage of blue-chip
customers. Scale, as measured by revenue, is significant
for the industry and helps RGHL lower its raw material costs. The
company also has high exposure to food and beverage packaging.
RGHL also maintains adequate liquidity with a large cash balance on hand.

The stable outlook reflects an expectation that RGHL will continue to
improve its operating performance, pay down debt and improve credit
metrics.

The ratings could be downgraded if there is deterioration in credit metrics,
liquidity or the competitive and operating environment. The ratings
could also be downgraded if the company pays a dividend or undertakes
any significant acquisition. Specifically, the ratings could
be downgraded if debt to EBITDA remains above 7.0 times,
EBIT to interest expense declined below 1.0 time, and free
cash flow to debt remained below 1.0%.

The rating could be upgraded if RGHL sustainably improves its credit metrics
within the context of a stable operating and competitive environment while
maintaining adequate liquidity including ample cushion under financial
covenants. Specifically, RGHL would need to improve debt
to EBITDA to below 6.3 times, EBIT to interest expense to
at least 1.4 times and free cash flow to debt to above 3.5%
while maintaining the EBIT margin in the high single digits.

The principal methodology used in these ratings was Global Packaging Manufacturers:
Metal, Glass, and Plastic Containers published in June 2009.
Other methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the US, Canada
and EMEA published in June 2009. Please see the Credit Policy page
on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moodys
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support providers credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.

Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moodys legal entity that has issued
the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.

Edward Schmidt
Vice President – Senior Analyst
Corporate Finance Group
Moodys Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
USA.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Brian B Oak
MD – Corporate Finance
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moodys Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
USA.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Fitch to Rate Betony CLO, Ltd./LLC; Issues Presale

NEW YORK–(BUSINESS WIRE)–Fitch Ratings expects to assign the following ratings to Betony CLO,
Ltd./LLC:

–$3,000,000 class X notes AAAsf; Outlook Stable;

–$320,000,000 class A notes AAAsf; Outlook Stable.

Fitch does not expect to rate the class A-DD, B, B-DD, C, C-DD, D, D-DD,
E, E-DD, F, F-DD or subordinated notes.

TRANSACTION SUMMARY

Betony CLO, Ltd. (the issuer) and Betony CLO, LLC (the co-issuer)
together comprise an arbitrage cash flow collateralized loan obligation
(CLO) that will be managed by Invesco Senior Secured Management, Inc.
(Invesco). Net proceeds from the issuance of secured and subordinated
notes will be used to purchase assets to reach a target portfolio of
approximately $500 million of primarily senior-secured leveraged loans.
The CLO will have a four-year reinvestment period.

KEY RATING DRIVERS

Sufficient Credit Enhancement: Credit enhancement (CE) of 36% for the
class A notes, in addition to excess spread, is sufficient to protect
against portfolio default and recovery rate projections in the AAAsf
stress scenario. The level of CE for class A notes is below the average
for recent CLO issuances. Class X notes are expected to be paid in full
from interest proceeds on the second payment date.

B Asset Quality: The average credit quality of the indicative
portfolio is B, which is comparable to recent CLOs. Issuers rated in
the B rating category denote relatively weak credit quality; however,
in Fitchs opinion, class X and A notes are unlikely to be affected by
the foreseeable level of defaults. Class X and A notes are robust
against default rates of up to 90.4% and 62.3%, respectively.

Strong Recovery Expectations: The indicative portfolio consists of 96.5%
senior-secured loans, of which about 88.1% have strong recovery
prospects or a Fitch-assigned Recovery Rating of RR2 or higher,
resulting in a base case recovery assumption of 74.7%. In determining
the ratings for the class X and A notes, Fitch stressed the indicative
portfolio by assuming a higher portfolio concentration of assets with
lower recovery prospects and further reduced recovery assumptions for
higher rating stresses, resulting in a 37.3% recovery rate assumption in
Fitchs AAAsf scenario.

RATING SENSITIVITIES

Fitch evaluated the structures sensitivity to the potential variability
of key model assumptions, including decreases in recovery rates and
increases in default rates or correlation. Fitch expects the class X
notes to remain AAAsf and the class A notes to remain investment grade
even under the most extreme sensitivity scenarios. Results under these
sensitivity scenarios ranged between A+sf and AAAsf for the class A
notes.

The expected ratings are based on information provided to Fitch as of
Feb. 18, 2015. Sources of information used to assess these ratings were
provided by the arranger, Morgan Stanley amp; Co. LLC, and the public
domain. Key Rating Drivers and Rating Sensitivities are further
described in the accompanying presale report.

The presale report is available to investors on Fitchs web site at www.fitchratings.com.
For more information about Fitchs comprehensive subscription service
FitchResearch, which includes all presale reports, surveillance and
credit reports on more than 20 asset classes, contact product sales at
+1-212-908-0800 or at webmaster@fitchratings.com.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

–Global Structured Finance Rating Criteria (Aug. 4, 2014);

–Global Rating Criteria for Corporate CDOs (July 25, 2014);

–Criteria for Interest Rate Stresses in Structured Finance
Transactions and Covered Bonds (Dec. 19, 2014);

–Counterparty Criteria for Structured Finance and Covered Bonds (May
14, 2014).

Applicable Criteria and Related Research: Betony CLO, Ltd./LLC (US
Structured Credit)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862334

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Global Rating Criteria for Corporate CDOs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=753057

Criteria for Interest Rate Stresses in Structured Finance Transactions
and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980080

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 AGENCYS PUBLIC WEBSITE WWW.FITCHRATINGS.COM.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCHS 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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE
RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR
RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY
CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.