Fitch Affirms IDRs of Citadel Kensington & Wellington at 'BBB-'; Outlook Revised to Stable

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of Citadel Kensington Global Strategies Fund, Ltd. (Kensington) and Citadel Wellington LLC (Wellington) at 'BBB-'. Fitch has also affirmed the long-term and short-term IDRs and senior debt rating of Citadel Finance Ltd., Kensington and Wellington's jointly owned subsidiary. The Rating Outlook for all entities has been revised to Stable from Negative.

Financial performance of the Kensington and Wellington funds has improved following significant losses in fiscal year (FY) 2008. The negative performance was compounded by record withdrawal requests during the period and deteriorating liquidity in broader capital markets, all of which led to management's decision to suspend redemptions in December 2008. The suspension facilitated an orderly fund restructure without jeopardizing secured or unsecured creditors. Redemptions were restored in November 2009.

As intended, management has reduced or eliminated the greatest risk exposures that contributed losses or those that were no longer considered core fund strategies. The diversification of funding sources and longer term nature of funding agreements also had a positive impact on the liquidity profile. Additionally, the funds benefit from financial flexibility within the Citadel Investment Group, as indicated by asset purchases (of liquid, noncore instruments) and temporary expense waivers. Throughout the recent market turmoil, debt and counterparty payments were met in an orderly fashion. Management was also able to repurchase a good portion of unsecured debt outstanding.

Management has demonstrated the financial acumen to sustain its operations with sufficient liquidity cushion during extreme markets. When performance dramatically declined, management exercised its right to protect creditors through the suspension of redemptions. Risk has been significantly reduced in terms of the number of exposures, the number of strategies, and the level of tail risk.

Fitch has affirmed the following ratings:

Citadel Kensington Global Strategies Fund Ltd.

--Long-term IDR at 'BBB-'.

Citadel Wellington LLC

--Long-term IDR at 'BBB-';

Citadel Finance Ltd.

--Long-term IDR at 'BBB-' ;

--Short-term IDR at 'F3' ;

--Senior unsecured at 'BBB-'.

The Outlook is Stable.

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

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Fitch Ratings
Leslie Bright, 212-908-0622, New York
David Spring, 312-368-3194, Chicago
or
Media Relations:
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Email: brian.bertsch@fitchratings.com

KEYWORDS:   United States  North America  New York

INDUSTRY KEYWORDS:   Professional Services  Banking

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