-- Finn Square CLO Ltd./Finn Square CLO 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
through D notes.
-- The preliminary ratings reflect our view of the
transaction's credit enhancement, legal structure, the
diversified collateral portfolio, and timely interest and
principal payments, among other factors.
NEW YORK (Standard & Poor's) Dec. 5, 2012--Standard & Poor's
Ratings Services today assigned its preliminary ratings to Finn
Square CLO Ltd./ Finn Square CLO Corp.'s $464.7 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. 5, 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 (CDO) 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 primarily
comprises broadly syndicated speculative-grade senior secured
-- 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
-- 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 will lead to the reclassification of excess interest
proceeds that are available prior to paying uncapped
administrative expenses and fees; collateral manager incentive
fees; and subordinated note payments into principal proceeds for
the purchase of additional collateral assets during the
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.
The Standard & Poor's 17g-7 Disclosure Report included in
this credit rating report is available at "".
RELATED CRITERIA AND RESEARCH Related Criteria
-- General Criteria: Global Investment Criteria For
Temporary Investments In Transaction Accounts, May 31, 2012
-- Counterparty Risk Framework Methodology And Assumptions,
May 31, 2012
-- CDO Spotlight: The Relationship Between Long-Dated Assets
And Market Value Risk In U.S. Cash Flow CLOs, April 26, 2012
-- Methodology For Analyzing Rating Confirmation Requests To
Establish Subsidiary Special-Purpose Entities in CDOs, Dec. 9,
-- 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.
-- 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
-- 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: Finn Square CLO Ltd./Finn Square CLO Corp., Dec.
-- Global Structured Finance Scenario And Sensitivity
Analysis: The Effects Of The Top Five Macroeconomic Factors,
Nov. 4, 2011
-- CDO Spotlight: Standard & Poor's Surveillance Process For
Monitoring U.S. Cash Flow CLO Transactions, April 14, 2011
-- CDO Spotlight: Update To General Cash Flow Analytics
Criteria For CDO Securitizations, Oct. 17, 2006
PRELIMINARY RATINGS ASSIGNED
Finn Square CLO Ltd./Finn Square CLO Corp.
Class Rating Amount
A-1 AAA (sf) 319.30
A-2 AA (sf) 56.1
B (deferrable) A (sf) 39.50
C (deferrable) BBB (sf) 24.60
D (deferrable) BB (sf) 25.20
Subordinated notes NR 50.70