Reuters logo
TEXT-S&P affirms Cedar Funding ratings after the effective date
October 2, 2012 / 5:50 PM / 5 years ago

TEXT-S&P affirms Cedar Funding ratings after the effective date

OVERVIEW
     -- Cedar Funding Ltd./Cedar Funding Corp.'s note issuance is backed by a 
revolving pool consisting primarily of broadly syndicated senior secured loans.
     -- We affirmed our ratings on the class A through D notes following the 
transaction's effective date as of Aug. 16, 2012.
     -- The "effective date" for a CLO transaction is typically the earlier of 
the date on which the transaction acquires the target level of portfolio 
collateral and the date defined in the transaction documents.
     -- When requested, Standard & Poor's will analyze the information 
provided by the trustee and determine whether it believes a rating affirmation 
is appropriate. Historically, many CLOs transaction documents contain 
provisions that require the trustee to request the rating agencies to affirm 
the closing date ratings within a certain timeframe after the effective date 
has occurred. 
     -- The effective date report provides a summary of certain collateral 
characteristics and liability ratings at the effective and closing dates.
 
NEW YORK (Standard & Poor's) Oct. 2, 2012--Standard & Poor's Ratings Services 
today affirmed its ratings on Cedar Funding Ltd./Cedar Funding Corp.'s $320.7 
million floating-rate notes following the transaction's effective date as of 
Aug. 16, 2012 (see list). 

Most U.S. cash flow collateralized debt obligations (CLOs) close before 
purchasing the full amount of their targeted level of portfolio collateral. On 
the closing date, the collateral manager typically covenants to purchase the 
remaining collateral within the guidelines specified in the transaction 
documents to reach the target level of portfolio collateral. Typically, the 
CLO transaction documents specify a date by which the targeted level of 
portfolio collateral must be reached. The "effective date" for a CLO 
transaction is usually the earlier of the date on which the transaction 
acquires the target level of portfolio collateral, or the date defined in the 
transaction documents. Most transaction documents contain provisions directing 
the trustee to request the rating agencies that have issued ratings upon 
closing to affirm the ratings issued on the closing date after reviewing the 
effective date portfolio (typically referred to as an "effective date rating 
affirmation").  

An effective date rating affirmation reflects our opinion that the portfolio 
collateral purchased by the issuer, as reported to us by the trustee and 
collateral manager, in combination with the transaction's structure, provides 
sufficient credit support to maintain the ratings that we assigned on the 
transaction's closing date. The effective date reports provide a summary of 
certain information that we used in our analysis and the results of our review 
based on the information presented to us.

We believe the transaction may see some benefit from allowing a window of time 
after the closing date for the collateral manager to acquire the remaining 
assets for a CLO transaction. This window of time is typically referred to as 
a "ramp-up period." Because some CLO transactions may acquire most of their 
assets from the new issue leveraged loan market, the ramp-up period may give 
collateral managers the flexibility to acquire a more diverse portfolio of 
assets.RELATED CRITERIA AND RESEARCH
     -- Transaction Update: Cedar Funding Ltd./Cedar Funding Corp., Oct. 2, 
2012
     -- CDO Monitor User Guide, available at www.cdointerface.com
     -- Presale: Cedar Funding Ltd./Cedar Funding Corp., May 18, 2012
     -- Global CDOs Of Pooled Structured Finance Assets: Methodology And 
Assumptions, Feb. 21, 2012
     -- Global Structured Finance Scenario And Sensitivity Analysis: The 
Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011
     -- Standard & Poor's Surveillance Process For Monitoring U.S. Cash Flow 
CLO Transactions, April 14, 2011
     -- Standard & Poor's Provides Guidance For Collateral Managers And 
Trustees Regarding CDO Monitor, Nov. 11, 2009
     -- Update To Global Methodologies And Assumptions For Corporate Cash Flow 
And Synthetic CDOs, Sept. 17, 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
     -- 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
 
RATINGS AFFIRMED
Cedar Funding Ltd./Cedar Funding Corp.

Class                        Rating          Amount

A-1                          AAA (sf)        227.50
A-2                          AA (sf)          39.65
B (deferrable)               A (sf)           24.50
C (deferrable)               BBB (sf)         15.75
D (deferrable)               BB (sf)          13.30

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below