NEW YORK (Standard & Poor‘s) Dec. 17, 2012--Standard & Poor’s Ratings Services today assigned its preliminary ratings to Madison Park Funding X Ltd./Madison Park Funding X LLC’s $717.0 million floating-rate notes (see list).
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 Dec. 17, 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 term loans.
-- 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 0.3489% to 13.8391%.
-- 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 of excess interest proceeds that are available prior to paying uncapped administrative expenses and fees; subordinated hedge termination payments; portfolio manager incentive fees; and subordinated note payments to principal proceeds for the purchase of additional collateral assets during the reinvestment period and to reduce the balance of the rated notes outstanding, sequentially, after the reinvestment period.
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 -- 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 -- 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: Madison Park Funding X Ltd./Madison Park Funding X LLC, Dec. 17, 2012 --
Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011
Madison Park Funding X Ltd./Madison Park Funding X LLC Class Rating Amount (mil. $) X AAA 4.00 A-1a AAA (sf) 300.00 A-1b AAA (sf) 15.75 A-2 AAA (sf) 172.50 B-1 AA (sf) 58.50 B-2 AA (sf) 30.00 C (deferrable) A (sf) 59.25 D (deferrable) BBB (sf) 39.50 E (deferrable) BB (sf) 37.50 Subordinated notes NR 85.00 NR--Not rated.
Primary Credit Analyst: Deborah L Newman, New York (1) 212-438-1000; email@example.com Secondary Contact: Paul Kalinauskas, New York (1) 212-438-1000; firstname.lastname@example.org Analytical Manager, U.S. Structured Credit New Issuance: Winston W Chang, New York (1) 212-438-1000; email@example.com