-- OHA Credit Partners VII Ltd./OHA Credit Partners VII
Inc.'s issuance is a CLO securitization backed by a revolving
pool consisting primarily of broadly syndicated senior secured
-- 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, diversified
collateral portfolio, and timely interest and principal
payments, among other factors.
NEW YORK (Standard & Poor's) Nov. 7, 2012--Standard & Poor's
Ratings Services today assigned its preliminary ratings to OHA
Credit Partners VII Ltd./OHA Credit Partners VII Inc.'s $696
million floating- and fixed-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 Nov.
7, 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 consists
primarily of 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 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
hedge amounts, subordinated note payments, and expenses related
to a refinancing) to principal proceeds for the purchase of
additional collateral assets or, after the noncall period, to
pay the notes sequentially, at the election of the collateral
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
-- Presale: OHA Credit Partners VII Ltd./OHA Credit Partners
VII Inc., Nov. 7, 2012
-- The Relationship Between Long-Dated Assets And Market
Value Risk In U.S. Cash Flow CLOs, April 26, 2012
-- 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
-- Counterparty And Supporting Obligations Update, Jan. 13,
-- Counterparty And Supporting Obligations Methodology And
Assumptions, Dec. 6, 2010
-- 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.
-- 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
-- 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
PRELIMINARY RATINGS ASSIGNED
OHA Credit Partners VII Ltd./OHA Credit Partners VII Inc.
Class Rating Amount (mil. $)
X AAA (sf) 4.5
A AAA (sf) 461.0
B-1 AA (sf) 87.0
B-2 AA (sf) 15.0
C-1 (deferrable)A (sf) 34.0
C-2 (deferrable)A (sf) 20.0
D (deferrable) BBB (sf) 38.5
E (deferrable) BB (sf) 36.0
Subordinated notes NR 74.0