S&P: OHA Credit Partners VIII Ltd. Ratings Affirmed On Six Classes
Today's rating actions follow our review of the transaction's performance, using data from the Aug. 1, 2016, trustee report. The transaction is scheduledto remain in its reinvestment period until April 2017.
Since the transaction’s effective date, the trustee reported that the collateral portfolio's weighted average life has decreased to 4.78 years from 5.51 years. This seasoning has decreased the overall credit risk profile, which, in turn, provided more cushion to the tranche ratings.
The transaction has experienced an increase in assets rated 'CCC+' and below since the September 2013 effective date report. Specifically, the level of assets rated 'CCC+' and below increased to $15.65 million from $1.39 million as of the effective date report. The transaction does not hold any defaulted assets.
According to the Aug. 1, 2016, trustee report that we used for this review, the overcollateralization (O/C) ratios for each class have exhibited a mild decline since the Sept. 1, 2013, trustee report, which we used for our effective date rating affirmations:
The class A/B O/C ratio was 132.99%, down from 133.30%.
The class C O/C ratio was 121.30%, down from 121.59%.
The class D O/C ratio was 113.88%, down from 114.15%.
The class E O/C ratio was 108.33%, down from 108.59%.
Even with the decline in credit support, all coverage tests are currently passing and are above the minimum requirements.
Although our cash flow analysis indicates higher ratings for the class B, C, D, and E notes, our rating actions consider additional sensitivity runs that considered the exposure to specific distressed industries and allowed for volatility in the underlying portfolio given that the transaction is still in its reinvestment period. The affirmation of the ratings reflect our belief that the credit support available is commensurate with the current rating levels.
We will continue to review whether, in our view, the ratings assigned to the notes remain consistent with the credit enhancement available to support them, and will take rating actions as we deem necessary.
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