Ratings Assigned to Six Classes From Marathon CLO VI Ltd. In Connection With Refinancing

Stocks and Financial Services Press Releases Tuesday May 15, 2018 10:25
NEW YORK--15 May--S&P Global Ratings

NEW YORK (S&P Global Ratings) May 14, 2018--S&P Global Ratings today assigned its ratings to the replacement class A-1-R2, A-2-R2, B-R2, C-R2, and D-R2 notes, as well as the new class X notes, from Marathon CLO VI Ltd., a collateralized loan obligation (CLO) originally issued in 2014 and partially refinanced in May 2017, that is managed by Marathon Asset Management L.P. We withdrew our ratings on the outstanding class A-1-R, A-2-R, B-R, C, D, and E notes following payment in full on the May 14, 2018, refinancing date (see list).

On the May 14, 2018, refinancing date, the proceeds from the issuance of the replacement notes were used to redeem the outstanding notes as outlined in the transaction document provisions. Therefore, we withdrew our ratings on the outstanding notes in line with their full redemption, and we are assigning ratings to the replacement notes.

The replacement notes are being issued via a supplemental indenture, which, in addition to outlining the terms of the replacement notes, will:
  • Add class X notes.
  • Issue the replacement class A-1-R2, B-R2, and C-R2 notes at a lower spread than the refinanced class.
  • Issue the replacement class A-2-R2 and D-R2 notes at a higher spread than the refinanced class.
  • Redeem and not reset the class E notes.
  • Extend the reinvestment period and stated maturity date two and three years, respectively.

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. 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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