NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two classes of notes issued by Wellfleet CLO 2019-1, Ltd. (Wellfleet 2019-1).
Wellfleet 2019-1 is a cash flow collateralized loan obligation (CLO) managed by Wellfleet Credit Partners, LLC (the collateral manger). The CLO will have a five-year reinvestment period and the legal final maturity is on July 20, 2032. The preliminary ratings reflect initial credit enhancement levels, excess spread, four levels of coverage tests including par value and interest coverage tests, and an interest reinvestment test.
The collateral in Wellfleet 2019-1 will mainly consist of broadly syndicated leveraged loans issued by corporate obligors diversified across sectors. The obligors in the portfolio have a K-WARF of 2347, which represents a weighted average portfolio assessment of approximately B. The total portfolio par amount is $400 million with expected exposures to over 220 obligors when the transaction is fully invested. The portfolio is nearly 50% ramped as of June 19, 2019 and the remainder will be acquired before the transaction’s effective date.
Established in 2015, Wellfleet Credit Partners, LLC (“Wellfleet”) is located in Greenwich, CT and is the performing credit platform of Littlejohn & Co., LLC (“Littlejohn”). It has issued 10 CLOs since 2015 and currently has approximately $4.2 billion in regulatory assets under management.
The Class A Notes have par subordination of 36% and 10% cushion on the senior overcollateralization test. The preliminary rating on the Class A Notes represent timely interest and ultimate principal.
The Combination Notes will carry a principal only rating which represents ultimate payment of the initial principal amount by legal final maturity. The Combination Notes will hold the following components:
|
Class |
Notional Amount of Component |
|
Class B |
$16,000,000 |
|
Subordinated Notes |
$4,000,000 |
KBRA analyzed the transaction using Global Structured Credit Rating Methodology published on August 7, 2018 and the Global Structured Finance Counterparty Methodology published on August 8, 2018.
The preliminary rating is based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of a final rating that differs from the preliminary rating.
|
Class |
Preliminary Rating |
Initial Principal Amount |
Certificate Type |
|
Class A |
AAA (sf) |
$256,000,000 |
Principal and Interest |
|
Combination Notes |
A+ (sf) |
$19,340,000 |
Principal Only |
To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
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About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
Contacts
Analytical Contacts:
George Lyons, CFA, Senior Director
(646) 731-3314
glyons@kbra.com
Sean Malone, CFA, Director
(646) 731-2436
smalone@kbra.com
Steven Zheng, Analyst
(646) 731-3379
szheng@kbra.com
Eric Hudson, Managing Director
(646) 731-3320
ehudson@kbra.com
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