Understanding Preliminary Ratings Assigned to RRE 23 CLO
Preliminary Ratings Assigned to RRE 23 Loan Management DAC
LONDON--KBRA UK (KBRA) has recently assigned preliminary ratings to various classes of notes issued by RRE 23 Loan Management DAC. This organization features a cash flow collateralised loan obligation (CLO) predominantly supported by a diversified portfolio of corporate loans issued in Euros.
Management and Structure of RRE 23 Loan Management
The management of RRE 23 Loan Management DAC is handled by Redding Ridge Asset Management (UK) LLP, commonly referred to as RRAM UK. It operates with a reinvestment period spanning 4.6 years and a total legal final maturity of 13 years. The ratings accorded reflect initial levels of credit enhancement and various coverage tests that include assessments of both par value and interest coverage, along with an overcollateralization test.
Portfolio Composition and Characteristics
This CLO will contain a diverse array of broadly syndicated leveraged loans and bonds issued by corporate entities distributed across various sectors. The target amount for the portfolio is set at €400.0 million, with diversifications reaching a total of 117 obligors. Notably, the obligors hold a K-WARF rating of 2560, indicative of a weighted average portfolio quality of approximately B.
Insights into RRAM UK
RRAM UK operates as a UK-based arm of Redding Ridge Asset Management LLC, which is an independent asset manager founded in 2016 with backing from Apollo Global Credit Management, LLC. RRAM UK is currently responsible for managing assets exceeding €7.7 billion, spread across eighteen distinct European CLOs.
Rating Classes Overview
The evaluation of the Class A-1 and A-2 Notes primarily considers the prompt payment of interest alongside the ultimate principal repayment by their respective stated maturity dates. On the other hand, the ratings for the Class B, C-1, C-2, and D Notes focus on ensuring the ultimate payment of both interest and principal by maturity.
Methodologies Utilized in Ratings
The methodologies that guide the assessment of the rating actions are crucial. They encompass frameworks such as Structured Credit: Structured Credit Global Rating Methodology, Structured Finance: Global Structured Finance Counterparty Methodology, and ESG Global Rating Methodology. Each methodological approach plays an integral role in determining credit ratings based on diverse operational factors.
Disclosures and Credit Factors
Rating considerations include comprehensive analyses that factor in potential influences that could prompt upgrades or downgrades in credit ratings. Detailed insights regarding key credit aspects, alongside the ESG factors influencing rating decisions, are critical, particularly where ESG considerations drive rating changes.
Understanding KBRA's Role
Kroll Bond Rating Agency, LLC (KBRA), is recognized as one of the prominent credit rating agencies. It operates globally and is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, its European counterpart is registered with the European Securities and Markets Authority, showcasing its strong regulatory compliance and industry recognition.
Contacting KBRA UK
KBRA UK is situated at 1 Connaught Place, 2nd Floor, London, England. The agency has shown a strong commitment to upholding rigorous ratings standards and disclosing relevant sector information to maintain transparency and trust within the financial community.
Frequently Asked Questions
What is RRE 23 Loan Management DAC?
RRE 23 Loan Management DAC is a cash flow collateralised loan obligation managed by RRAM UK, focusing on Euro-denominated loans.
Who manages the RRE 23 CLO?
RRE 23 Loan Management DAC is managed by Redding Ridge Asset Management (UK) LLP, a subsidiary of Redding Ridge Asset Management LLC.
What are the primary assets in the RRE 23 portfolio?
The portfolio primarily consists of broadly syndicated leveraged loans and bonds issued by diversified corporate obligors.
What is the significance of K-WARF?
K-WARF represents a weighted average rating factor of the obligors, providing insight into the credit quality of the portfolio.
How does KBRA ensure its credit ratings uphold standards?
KBRA follows stringent methodologies and regulatory practices to ensure accurate and reliable credit ratings, contributing to stability in the market.
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