DBRS Confirms Ratings on Senior Funding Facility and Mezzanine Funding Facility of Myers Park CLO, Ltd.

DBRS, Inc. (DBRS) confirmed the rating of A (sf) on the Senior Funding Facility and the rating of BBB (low) (sf) on the Mezzanine Funding Facility (together, the Facilities) issued by Myers Park CLO, Ltd. pursuant to the Amended and Restated Warehouse Agreement (the Amendment), dated as of June 29, 2018, between Myers Park CLO, Ltd. as Borrower; Barclays Bank PLC, New York Branch (Barclays) as Facility Agent; GSO/Blackstone Debt Funds Management LLC (GSO) as Collateral Manager; and U.S. Bank National Association as Collateral Administrator, Securities Intermediary and Security Agent.

The rating on the Senior Funding Facility addresses the timely payment of the Senior Base Interest Amount and the ultimate payment of the Senior Funding Amounts on or before the Scheduled Maturity Date in February 2027. The rating on the Mezzanine Funding Facility addresses the ultimate payment of the Mezzanine Base Interest Amount and the ultimate payment of the Mezzanine Funding Amounts on or before the Scheduled Maturity Date in February 2027. For the avoidance of doubt, these ratings do not address the Senior Additional Interest Amount or the Mezzanine Additional Interest Amount.

The rating actions were taken to reflect the impact of the execution of the Amendment. The amended language adds an Additional Subordinated Lender to the transaction.

An early maturity date can be caused by an Optional Early Maturity Date (no earlier than 12 months after the reinvestment period end date) or at the sole option of the Instructing Party (Barclays) following an EOD. Under the Warehouse Agreement, upon an occurrence of (and during the continuation of) an Event of Default, the Instructing Party (Barclays) may, in its sole option, elect to designate an Acceleration Date and liquidate the portfolio.

The transaction contains collateral manager and subordinated lender types of Events of Default, which could lead to acceleration and liquidation. However, the transaction is at closing a single-lender facility, where Barclays retains 100% of the rated Facilities. If, at any time, additional lenders are admitted into either rated facility, DBRS may either take a rating action or withdraw the rating on such facility at that time, subject to future amendments.

DBRS’s rating analysis does not take into account the risk of loss due to liquidation at market prices after an Event of Default has occurred.

The rating confirmations by DBRS do not signify the approval of the Amendment by DBRS or an opinion by DBRS as to whether the Amendment is beneficial or detrimental to the holders of the securities.

The confirmations reflect the following primary considerations:

(1) The Amended and Restated Warehouse Agreement dated as of June 29, 2018.

(2) The integrity of the transaction structure.

(3) Adequate credit enhancement to withstand projected collateral loss rates under various cash flow stress scenarios.

(4) DBRS’s assessment of the origination, servicing and collateralized loan obligation management capabilities of GSO as Collateral Manager.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating CLOs and CDOs of Large Corporate Credit, which can be found on dbrs.com under Methodologies.

This rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

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