OREANDA-NEWS. Fitch Ratings has assigned the following ratings and Rating Outlooks for Voya CLO 2016-2, Ltd./ LLC:

--$259,000,000 Class A-1 Notes 'AAAsf'; Outlook Stable.

--$34,320,000 Combination Securities 'A-sf'; Outlook Stable.

Fitch does not rate the class A-2, B, C, D, or subordinated notes. The combination securities consist of underlying components from the class A-2, B and subordinated notes. The rating of the combination securities addresses the ultimate receipt of the combination securities balance in accordance with the terms of the securities and the underlying classes of notes.

TRANSACTION SUMMARY

Voya CLO 2016-2, Ltd. (the issuer) and Voya CLO 2016-2, LLC (the co-issuer) comprise an arbitrage cash flow collateralized loan obligation (CLO) that will be managed by Voya Alternative Asset Management LLC (VAAM). Net proceeds from the issuance of the secured and subordinated notes will be used to purchase a portfolio of approximately $400 million of primarily senior secured leveraged loans. The CLO will have an approximately five-year reinvestment period and two-year non-call period.

KEY RATING DRIVERS

Sufficient Credit Enhancement: Credit enhancement (CE) of 35.3% for class A-1 notes, in addition to excess spread, is sufficient to protect against portfolio default and recovery rate projections in an 'AAAsf' stress scenario. The degree of CE available to class A-1 notes is below the average CE of recent 'AAAsf' CLO notes; however, cash flow modeling indicates performance in line with other Fitch-rated 'AAAsf' CLO notes. With respect to the combination securities, CE provided by the class A-2, B and subordinated notes is sufficient to protect against portfolio default and recovery assumptions in an 'A-sf' stress scenario.

'B+/B' Asset Quality: The average credit quality of the indicative portfolio is 'B+/B', which is in line with that of recent CLOs. Issuers rated in the 'B' rating category denote a highly speculative credit quality; however, in Fitch's opinion, the class A-1 notes and the combination securities are unlikely to be affected by the foreseeable level of defaults. Class A-1 notes are projected to be able to withstand default rates of up to 60.1% and the combination securities are expected to receive repayment of their full principal balance from the application of principal and interest proceeds from the underlying note components.

Strong Recovery Expectations: The indicative portfolio consists of 97.5% first-lien senior secured loans. Approximately 90.5% of the indicative portfolio has either strong recovery prospects or a Fitch-assigned Recovery Rating of 'RR2' or higher and the base case recovery assumption is 79.7%. In determining the ratings for class A-1 notes and the combination securities, Fitch stressed the indicative portfolio by assuming a higher portfolio concentration of assets with lower recovery prospects and further reduced recovery assumptions for higher rating stress assumptions, resulting in a 38% recovery rate assumption in Fitch's 'AAAsf' scenario and 50.6% in Fitch's 'A-sf' scenario.

RATING SENSITIVITIES

Fitch evaluated the structure's sensitivity to the potential variability of key model assumptions including decreases in weighted average spread or recovery rates and increases in default rates or correlation. Fitch expects the class A-1 notes to remain investment grade, while the combination securities are expected to remain within two rating categories of their assigned rating, even under the most extreme sensitivity scenarios. Results under these sensitivity scenarios ranged between 'Asf' and 'AAAsf' for the class A-1 notes and between 'BBsf' and 'AAAsf' for the combination securities.

Key Rating Drivers and Rating Sensitivities are further described in the accompanying new issue report, which is available to investor's on Fitch's website at 'fitchratings. com'

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

The publication of a representations, warranties and enforcement mechanisms appendix is not required for this transaction.