TEXT-S&P rates Magnetite VII Ltd/Magnetite VII Corp notes

Wed Dec 19, 2012 5:56pm EST

OVERVIEW
     -- Magnetite VII Ltd./Magnetite VII Corp.'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 A, B, C, and D notes.
     -- The preliminary ratings reflect our view of the transaction's credit 
enhancement, legal structure, diversified collateral portfolio, and projected 
timely interest and principal payments, among other factors.
 
NEW YORK (Standard & Poor's) Dec. 19, 2012--Standard & Poor's Ratings Services 
today assigned its preliminary ratings to Magnetite VII Ltd./Magnetite VII 
Corp.'s $552 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 Dec. 19, 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 AssumptionsRELATED CRITERIA AND RESEARCH
Related Criteria
     -- Global Investment Criteria For Temporary Investments In Transaction 
Accounts, May 31, 2012
     -- Counterparty Risk Framework Methodology And Assumptions, May 31, 2012
     -- Methodology For Analyzing Rating Confirmation Requests To Establish 
Subsidiary Special-Purpose Entities In CDOs, Dec. 9, 2009
     -- Update To Global Methodologies And Assumptions For Corporate Cash Flow 
And Synthetic CDOs, Sept. 17, 2009
     -- Surveillance Methodology For Global Cash Flow And Hybrid CDOs Subject 
To Acceleration Or Liquidation After An EOD, Sept. 2, 2009
     -- Methodology For Analyzing Rating Confirmation Requests To Replace 
Collateral Managers In Global CDOs, Aug. 13, 2009
     -- Revised CDO Current-Pay Criteria Assumptions For Corporate Debt When 
Issuers Announce A Distressed Exchange Or Buyback, May 18, 2009
     -- The Use Of Rating-Based Haircuts In Event Of Default 
Overcollateralization Tests For CDOs, March 19, 2008
     -- Qualification And Treatment Of Current-Pay Obligations In Global Cash 
Flow CLOs, July 11, 2007
     -- Legal Criteria For U.S. Structured Finance Transactions: 
Special-Purpose Entities, Oct. 1, 2006
     -- CDO Spotlight: General Cash Flow Analytics For CDO Securitizations, 
Aug. 25, 2004
     -- Structured Finance Criteria Introduced For Cayman Islands 
Special-Purpose Entities, July 18, 2002
     -- Global Cash Flow and Synthetic CDO Criteria: The CDO Product, March 
21, 2002
Related Research
     -- Presale: Magnetite VII Ltd./Magnetite VII Corp., Dec. 19, 2012
     -- Global Structured Finance Scenario And Sensitivity Analysis: The 
Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011

 
PRELIMINARY RATINGS ASSIGNED

Magnetite VII Ltd./Magnetite VII Corp.  

Class                  Rating          Amount

A-1 senior notes(i)    AAA (sf)             0
A-1A                   AAA (sf)        360.00
A-1B                   AAA (sf)         12.00
A-2A                   AA (sf)          35.00
A-2B                   AA (sf)          40.00
B (deferrable)         A (sf)           47.40
C (deferrable)         BBB (sf)         28.80
D (deferrable)         BB (sf)          28.80
Subordinated notes     NR               58.15

(i)The class A-1 senior note will originally be issued with a principal amount 
of zero. Upon a class A-1 exchange, the principal amount of the class A-1 
senior notes will be equal to the aggregate outstanding amount of the class 
A-1A and A-1B notes. NR--Not rated.
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