NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three categories of notes issued by RR 17 Ltd (RR 17), a cash flow secured loan obligation (CLO) backed by a diversified portfolio of loans to largely unionized companies.
RR 17 is managed by Redding Ridge Asset Management LLC (“RRAM” or the “Collateral Manager”) and will have a five-year reinvestment period. The legal final maturity is July 15, 2034. Ratings reflect initial levels of credit enhancement, credit spreads and hedging tests, including overcollateralisation ratio and interest coverage tests.
The RR 17 guarantee will consist mainly of largely syndicated leveraged loans issued by debtor companies diversified in all sectors. The total nominal amount of the portfolio is $ 700 million with exposure to 195 debtors. Debtors in the portfolio have a K-WARF of 2431, which represents a weighted average portfolio credit rating of approximately B. KBRA has also taken into account the potential for negative credit deterioration of the portfolio in the short to medium term and the sensitivity of transactions to macroeconomic shocks such as that observed. during the COVID-19 pandemic.
RRAM is an independent asset management company formed by Apollo Global Credit Management, LLC (“Apollo”) in 2016 to manage CLOs. RRAM manages over $ 12.5 billion in total assets in 21 CLOs and warehouse financings active in the United States and Europe as of March 2021. In addition, through service agreements, the RRAM platform benefits certain Apollo resources, including credit research and administration services.
The preliminary rating for the Class A-1a notes takes into account the one-time payment of interest and the final payment of principal on the applicable stated maturity date, while the preliminary ratings for the Class B and C notes take into account the final payment of the principal. interest and principal by the due date indicated.
Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an upgrade or downgrade, and ESG factors (when they are a key factor in changing the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially significant sources that were used in preparing the credit rating and information on the method (s) (including models and sensitivity analyzes of the relevant key rating assumptions, if any) used to determine the credit rating are available in the information disclosure form (s) located here.
Information on the meaning of each rating category can be located here.
Further information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures can be found at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.