Ratings Assigned To Five Classes From BlueMountain CLO 2016-1 Ltd. In Connection With Refinancing

Stocks and Financial Services Press Releases Tuesday June 5, 2018 10:11
CENTENNIAL--5 Jun--S&P Global Ratings

CENTENNIAL (S&P Global Ratings) June 4, 2018--S&P Global Ratings today assigned its ratings to the class A-R, B-R, C-R, D-R, and E-R replacement notes from BlueMountain CLO 2016-1 Ltd., a collateralized loan obligation (CLO) originally issued in 2016 that is managed by BlueMountain Capital Management LLC. We withdrew our ratings on the class A, B, C, D, and E notes following payment in full on the June 4, 2018, refinancing date (see list).

The ratings reflect our opinion that the credit support available is commensurate with the associated rating levels.

On the June 4, 2018, refinancing date, the proceeds from the issuance of the replacement notes were used to redeem the original notes. Therefore, we withdrew our ratings on the refinanced notes in line with their full redemption, and we are assigning ratings to the replacement notes.

Based on provisions in the supplemental indenture:
  • The replacement class A-R, B-R, C-R, D-R, and E-R notes are issued at lower spreads than the original notes.
  • The non-call period will be extended to June 2019.
  • The weighted average life test date will be extended to 6.5 years after the deal closes.

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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