OREANDA-NEWS. Fitch Ratings has affirmed the 'AAA' long-term ratings of the following Variable Rate Term Preferred Shares (VRTP shares) issued by two senior loan closed-end funds (CEFs) managed by Invesco Advisers, Inc. (NYSE:IVZ):

Invesco Dynamic Credit Opportunities Fund (NYSE:VTA)

--$125,000,000 of VRTP shares, due September 2017, with a liquidation preference of $100,000 per share issued in series C-1, C-2, C-3, C-4 and L-1.

Invesco Senior Income Trust (NYSE:VVR)

--$125,000,000 of VRTP shares, due September 2017, with a liquidation preference of $100,000 per share issued in series C-1, C-2, C-3, C-4 and L-1.

KEY RATING DRIVERS

The 'AAA' rating affirmation reflects:

--Sufficient asset coverage provided to the VRTP shares as calculated per the fund's over-collateralization (OC) tests;

--The structural protections afforded by mandatory collateral maintenance and de-leveraging provisions in the event of asset coverage declines;

--The legal and regulatory parameters that govern the fund's operations;

--The capabilities of Invesco Advisers, Inc. as fund adviser.

FUND PROFILES

Invesco Dynamic Credit Opportunities Fund is a diversified, closed-end management investment company. The fund commenced investment operations on June 26, 2007 and is registered under the Investment Company Act of 1940 (the 1940 Act). The fund's primary investment objective is to seek a high level of current income with a secondary objective of capital appreciation. Under normal market conditions, the fund will invest at least 80% of its net assets in any combination of senior secured floating-rate and fixed-rate loans, and second lien or other subordinated or unsecured floating-rate and fixed-rate loans or debt. The fund also may invest up to 20% of its assets in structured products, including collateralized debt and loan obligations. VTA had approximately $1.1 billion of total assets as of July 31, 2016.

Invesco Senior Income Trust is a diversified, closed-end management investment company. The fund commenced investment operations on June 23, 1998 and is registered under the 1940 Act. The fund's investment objective is to provide a high level of current income, consistent with preservation of capital. Under normal market conditions the fund pursues its objective by investing at least 80% of its total assets in senior secured loans. VVR had approximately $972 million of total assets as of July 31, 2016.

FUNDS' LEVERAGE

Invesco Dynamic Credit Opportunities Fund employs leverage in the form of a revolving line of credit, of which $295 million was drawn as of the July 31, 2016, and $125 million of VRTP shares. The bank line is secured by a general senior first claim on the fund's assets, which is reflected in Fitch's OC and Net OC calculations. The VRTP shares are subordinate to the line of credit and senior to the fund's outstanding common shares.

Invesco Senior Income Trust employs leverage in the form of a revolving line of credit, of which $225 million was drawn as of July 31, 2016, and $125 million of VRTP shares. The bank line is secured by a general senior first claim on the fund's assets, which is reflected in Fitch's OC and Net OC calculations. The VRTP shares are subordinate to the line of credit and senior to the fund's outstanding common shares.

ASSET COVERAGE

Both funds' asset coverage ratios, as calculated in accordance with the Fitch total, and net OC tests (Fitch OC Tests) per the 'AAA' rating guidelines outlined in Fitch's applicable criteria, were in excess of 100%. This is the minimum threshold required under the terms of the VRTP shares.

The tests calculate standardized asset coverage by applying haircuts to portfolio holdings based on perceived riskiness and diversification of the assets and measuring its ability to cover both on - and off-balance-sheet liabilities, if any, at the assigned 'AAA' stress level.

The funds' asset coverage ratios for the VRTP Shares, as calculated in accordance with the 1940 Act, were in excess of the minimum asset coverage threshold of 225% required by the fund's governing documents (Preferred Shares Asset Coverage Test).

The funds have covenanted to maintain the effective leverage ratio (Effective Leverage Test) for the VMTP Shares at or below 45% of total assets. The fund's Effective Leverage Ratio is currently below 45% as noted above.

In the event of breaches to any of the above thresholds, the funds are required to restore compliance per structural protections described below.

STRUCTURAL PROTECTIONS

Compliance with the Fitch OC, Preferred Shares Asset Coverage Test and Effective Leverage threshold is tested periodically. The funds' manager is expected to cure any breach by altering the composition of the portfolios toward assets with lower discount factors (for Fitch OC breaches), or by reducing leverage in a sufficient amount (for all other breaches) within a pre-specified time period. In the event of a breach of the Fitch OC, Asset Coverage or Effective Leverage Tests, the allotted time to restore compliance is consistent with Fitch's 60 business day criteria guideline.

THE FUNDS' ADVISER

Invesco Advisers, Inc., an indirect, wholly owned subsidiary of Invesco, Ltd., is the fund's adviser, responsible for the fund's overall investment strategy and its implementation. Invesco Ltd. had approximately $779.6 billion of assets under management as of June 30, 2016.

RATING SENSITIVITIES

The ratings assigned to the preferred shares may be sensitive to material changes in the leverage composition, portfolio credit quality or market risk of the funds, as described above. A material adverse deviation from Fitch guidelines for any key rating driver could cause ratings to be lowered by Fitch. The funds have the ability to assume economic leverage through derivative transactions which may not be captured by the fund's Preferred Shares Asset Coverage test but are captured by the Fitch OC tests.