Reuters: Financial Services and Real Estate: TEXT-S&P Asgns GoldenTree Loan Opportunities VI Nts Prelim Rtgs

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TEXT-S&P Asgns GoldenTree Loan Opportunities VI Nts Prelim Rtgs Apr 30th 2012, 23:11 Mon Apr 30, 2012 7:11pm EDT (The following was released by the rating agency) OVERVIEW -- GoldenTree Loan Opportunities VI Ltd./GoldenTree Loan Opportunities VI LLC's issuance is a CLO securitization backed by a revolving pool consisting primarily of broadly syndicated senior secured loans. -- We assigned our preliminary ratings to the class X, A, B, C, D, and E notes. -- The preliminary ratings reflect our view of the transaction's credit enhancement, legal structure, collateral portfolio, and overcollateralization and interest coverage tests, among other factors. NEW YORK (Standard & Poor's) April 30, 2012 --Standard & Poor's Ratings Services today assigned its preliminary ratings to GoldenTree Loan Opportunities VI Ltd./GoldenTree Loan Opportunities VI LLC's $463.95 million floating-rate notes (see list). The note issuance is a collateralized loan obligation securitization backed by a revolving pool consisting primarily of broadly syndicated senior secured loans. The preliminary ratings are based on information as of April 30, 2012. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect our view of: -- The credit enhancement provided to the preliminary rated notes through the subordination of cash flows that are payable to the subordinated notes. -- The transaction's credit enhancement, which is sufficient to withstand the defaults applicable for the supplemental tests (not counting excess spread), and cash flow structure, which can withstand the default rate projected by Standard & Poor's CDO Evaluator model, as assessed by Standard & Poor's using the assumptions and methods outlined in its corporate collateralized debt obligation criteria (see "Update To Global Methodologies And Assumptions For Corporate Cash Flow And Synthetic CDOs," published Sept. 17, 2009). -- The transaction's legal structure, which is expected to be bankruptcy remote. -- The diversified collateral portfolio, which consists primarily of broadly syndicated speculative-grade senior secured term loans. -- The collateral manager's experienced management team. -- Our projections regarding the timely interest and ultimate principal payments on the preliminary rated notes, which we assessed using our cash flow analysis and assumptions commensurate with the assigned preliminary ratings under various interest-rate scenarios, including LIBOR ranging from 0.3439%-13.8391%. -- The transaction's overcollateralization and interest coverage tests, a failure of which will lead to the diversion of interest and principal proceeds to reduce the balance of the rated notes outstanding. -- The transaction's interest diversion test, a failure of which during the reinvestment period will lead to the reclassification of up to 50% of excess interest proceeds that are available (before paying subordinated and incentive collateral management fees, uncapped administrative expenses and fees, and uncapped hedge amounts and subordinated note payments) to principal proceeds for the purchase of additional collateral assets. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. Link this Share this Digg this Email Reprints

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