KBRA Assigns Preliminary Ratings to BlackRock Rainier CLO VI, Ltd.

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes and one class of loans issued by BlackRock Rainier CLO VI, Ltd. (BlackRock Rainier CLO VI), a cash flow collateralized loan obligation (CLO) back by a diversified portfolio of middle market corporate loans.

BlackRock Rainier CLO VI is managed by BlackRock Capital Investment Advisors, LLC (BlackRock or the collateral manager) and will have a four-year reinvestment period. The legal final maturity is on April 15, 2033. The ratings reflect initial credit enhancement levels, excess spread, and coverage tests including overcollateralization ratio and interest coverage tests.

The collateral in BlackRock Rainier CLO VI will mainly consist of middle market leveraged loans issued by corporate obligors diversified across sectors. The total portfolio par amount is $800 million with exposure to 117 obligors. The obligors in the portfolio have a K-WARF of 3127, which represents a weighted average portfolio credit assessment of approximately B-. Due to the economic fallout from COVID-19, we expect pressure on overall portfolio credit quality. As such, it is likely that the portfolio’s K-WARF will increase in the near term. KBRA considered the impact of potential credit migration.

BlackRock is a direct lender and the U.S. middle market CLO management arm of global credit platform of BlackRock, Inc. BlackRock, Inc. is a global asset manager with approximately $2.5 trillion in fixed income assets under management (AUM) including approximately $1.9 billion in middle market CLO AUM across 4 reinvesting CLOs. The senior management team has extensive industry experience.

The preliminary ratings on the Class A Notes, Class A-L Loans and Class B Notes consider the timely payment of interest and ultimate payment of principal by the applicable stated maturity date, while the preliminary ratings on the Class C, D and E Notes consider the ultimate payment of interest and principal.

KBRA analyzed the transaction using Structured Credit Global Rating Methodology and the Global Structured Finance Counterparty Methodology.

Click here to view the report. To access ratings and relevant documents, click here.

Related Publication

• Structured Credit Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

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