-- Octagon Investment Partners XIV, Ltd./Octagon Investment
Partners XIV, LLC's issuance is a CLO securitization backed by a
revolving pool consisting primarily of broadly syndicated senior
-- We assigned our preliminary ratings to the class A
through E notes.
-- The preliminary ratings reflect our view of the
transaction's credit enhancement, legal structure, and
diversified collateral portfolio, among other factors.
NEW YORK (Standard & Poor's) Nov. 25, 2012--Standard &
Poor's Ratings Services today assigned its preliminary ratings
to Octagon Investment Partners XIV, Ltd./Octagon Investment
Partners XIV, LLC's $474.5 million floating-rate notes (see
The note issuance is 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 Nov.
23, 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
(excluding 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 consists
primarily of broadly syndicated speculative-grade senior-secured
-- The portfolio 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 reinvestment overcollateralization
test, a failure of which will lead to the reclassification up to
50% of excess interest proceeds that are available prior to
paying uncapped administrative expenses and fees, subordinated
hedge termination payments, portfolio manager incentive fees,
and class F and subordinated note payments to 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
-- 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,
-- Update To Global Methodologies And Assumptions For
Corporate Cash Flow And Synthetic CDOs, Sept. 17, 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
-- CDO Spotlight: Update To General Cash Flow Analytics
Criteria For CDO Securitizations, Oct. 17, 2006
-- 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: Octagon Investment Partners XIV, Ltd./Octagon
Investment Partners XIV, LLC, Nov. 25, 2012
-- Comments Requested On Proposed Changes To Rating Agency
Confirmation Approach, Aug. 16, 2010
PRELIMINARY RATINGS ASSIGNED
Octagon Investment Partners XIV Ltd./Octagon Investment
Partners XIV LLC
Class Rating Amount
A-1 AAA (sf) 314.75
A-2 AA (sf) 52.50
B (deferrable) A (sf) 42.75
C (deferrable) BBB (sf) 25.00
D (deferrable) BB- (sf) 28.25
E (deferrable) B (sf) 11.25 '
Subordinated notes NR 47.30