Preliminary Ratings Assigned To Six Classes From Atlas Senior Loan Fund III Ltd. In Connection With Proposed Refinancing

Stocks and Financial Services Press Releases Wednesday November 15, 2017 08:51
NEW YORK--15 Nov--S&P Global Ratings

NEW YORK (S&P Global Ratings) Nov. 14, 2017--S&P Global Ratings today assigned its preliminary ratings to the class A-R, B-R, C-R, D-R, and E-R replacement notes, and the class X notes from Atlas Senior Loan Fund III Ltd., a collateralized loan obligation (CLO) originally issued in July 2013 that is managed by Crescent Capital Group L.P. (see list). The replacement notes will be issued via a proposed supplemental indenture.

The preliminary ratings reflect our opinion that the credit support available is commensurate with the associated rating levels.
The preliminary ratings are based on information as of Nov. 14, 2017. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

On the Nov. 17, 2017, refinancing date, the proceeds from the issuance of the replacement notes are expected to redeem the original notes. At that time, we anticipate withdrawing the ratings on the original notes and assigning ratings to the replacement notes. However, if the refinancing doesn't occur, we may affirm the ratings on the original notes and withdraw our preliminary ratings on the replacement notes.

The replacement notes are being issued via a proposed supplemental indenture, which, in addition to outlining the terms of the replacement notes, will also:
  • Extend the stated maturity, reinvestment period, and non-call period; and
  • Update the S&P Global Ratings industry codes and recovery rates, and incorporate the formula version of Standard & Poor's CDO Monitor.
Replacement Notes
Class Amount Interest
(mil. $) rate (%)
X 4.200 Three-month LIBOR + 0.60
A-R 255.200 Three-month LIBOR + 0.83
B-R 48.000 Three-month LIBOR + 1.30
C-R (deferrable) 25.000 Three-month LIBOR + 1.75
D-R (deferrable) 24.000 Three-month LIBOR + 2.60
E-R (deferrable) 17.900 Three-month LIBOR + 6.00
Subordinated notes 53.530
N/A N/A--Not applicable.

Our review of this transaction included a cash flow analysis, based on the portfolio and transaction as reflected in the trustee report, to estimate future performance (see table). In line with our criteria, our cash flow scenarios applied forward-looking assumptions on the expected timing and pattern of defaults, and recoveries upon default, under various interest rate and macroeconomic scenarios. In addition, our analysis considered the transaction's ability to pay timely interest or ultimate principal, or both, to each of the rated tranches.

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 we will take further rating actions as we deem necessary.


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