Fitch Affirms Preferred Shares of 2 Advent/Claymore Convertible Funds at 'AAA'

CHICAGO--(BUSINESS WIRE)--

Fitch Ratings has affirmed the 'AAA' rating assigned to the following auction market preferred shares (AMPS) issued by Advent/Claymore Convertible Securities and Income Fund AVK and Advent/Claymore Convertible Securities & Income Fund II AGC, both leveraged multi-sector closed-end funds managed by Advent Capital Management, LLC (Advent):

AVK

--$1,575,135 AMPS consisting of series M7, T28, W7, W28, Th28 and F7, each with a liquidation preference of $25,000 per share.

AGC

--$600,048 AMPS consisting of series T7 and W7, each with a liquidation preference of $25,000 per share.

KEY RATING DRIVERS

The affirmation follows Fitch's annual review of the funds and reflects:

--Sufficient asset coverage relative to Fitch's published criteria;

--The 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;

--The capabilities of Advent as the investment advisor.

Fitch's ratings on the AMPS speak only to timely repayment of interest and principal in accordance with the governing documents and not to potential liquidity in the secondary market.

TENDER OFFERS

On Nov. 9, 2012, AVK and AGC announced a tender for up to 100% of its outstanding AMPS for both funds. The funds offered to purchase the AMPS at 99% of the liquidation preference of $25,000 per share (or $24,750 per share), plus any unpaid dividends accrued through the expiration of the offer. The funds accepted for payment 10,417 AMPS of AVK and 6,776 AMPS of AGC that were properly tendered and not withdrawn, which represented approximately 99.4% and 99.7%, respectively, of outstanding AMPS. The AMPS of the funds that were not tendered will remain outstanding. The funds are refinancing their tendered AMPS through alternative forms of leverage, including borrowings under margin loan agreements and reverse repurchase agreement transactions.

LEVERAGE

As of March 28, 2013, the AVK's total assets were approximately $801 million. The fund's total leverage was approximately $264 million or 33% of total assets, consisting of primarily of an unrated senior credit facility ($262.4 million) and a small amount of outstanding AMPS ($1.6 million).

As of March 28, 2013, the AGC's total assets were approximately $482 million. The fund's total leverage was approximately $170.8 million or 35% of total assets, consisting of primarily of an unrated senior credit facility ($170.2 million) and a small amount of outstanding AMPS ($600,048).

ASSET COVERAGE

As of March 28, 2013, both funds' 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. These tests serve as minimum asset coverage covenants required by the funds' governing documents. Should the asset coverage for the AMPS decline below 100%, the governing documents require the funds to restore compliance within a specified time period.

Additionally, the funds' asset coverage ratios for total leverage, as calculated in accordance with the Investment Company Act of 1940 (1940 Act), was in excess of 200%, which is also a minimum asset coverage required by the funds' governing documents.

FUND PROFILES

Advent/Claymore Convertible Securities and Income Fund is a diversified closed-end management investment company registered under the Investment Company Act of 1940, as amended, that commenced investment operations in April 2003. The fund's investment objective is to provide total return through a combination of capital appreciation and current income. The fund pursues its objective by investing at least 80% of its managed assets in a diversified portfolio of convertible securities and non-convertible income securities.

Advent/Claymore Convertible Securities & Income Fund II, is a diversified closed-end management investment company registered under the Investment Company Act of 1940, as amended, that commenced investment operations in May 2007. The fund's investment objective is to provide total return through a combination of capital appreciation and current income. The fund pursues its objective by investing at least 80% of its managed assets in a diversified portfolio of convertible securities and non-convertible income securities.

FUND ADVISOR

Advent Capital Management, LLC (Advent) serves as the AVK investment adviser and the AGC investment manager. Advent managed approximately $6 billion in assets as of March 31, 2013. Advent specializes in global convertible, high-yield, and equity securities investing across its main business lines of long-only strategies, hedge funds, and closed-end funds.

Fitch views Advent's investment management capabilities, operational controls, corporate governance, and compliance procedures as consistent with the ratings assigned to the AMPS. Positive developments during Fitch's latest manager review include Advent's increased emphasis on risk management and transparent portfolio construction.

Guggenheim Funds Distributors, Inc. (Guggenheim Funds), serves as servicing agent to AVK and the investment adviser to AGC. Guggenheim Funds and its associated entities are subsidiaries of Guggenheim Partners, LLC, a global, diversified financial services firm with more than $100 billion in assets under supervision as of March 30, 2013. Guggenheim Funds and Advent are registered investment advisors with the SEC.

RATING SENSITIVITY

The rating 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.

The sources of information used to assess this rating were the public domain and Advent Capital Management, LLC.

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=790185

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