OREANDA-NEWS. S&P Global Ratings today assigned its rating to the class A-2-R senior secured floating-rate notes from Octagon Investment Partners XVII Ltd., a collateralized loan obligation (CLO) originally issued in 2013. We withdrew our rating on the class A-2 notes from this transaction after they were fully redeemed. In addition, we affirmed our ratings on the class A-1, A-3, B-1, B-2, C, D, E, and F notes (see list).

On the Sept. 2, 2016, refinancing date, the proceeds from the class A-2-R replacement note issuance were used to redeem the original class A-2 notes as outlined in the transaction document provisions. Therefore, we withdrew our rating on the original notes in line with their full redemption, and assigned a rating to the replacement notes. In addition, we affirmed our ratings on all other classes, as the current class A-1, A-3, B-1, B-2, C, D, E, and F notes were not refinanced and were therefore not affected by the refinancing.

Although our cash flow analysis indicated higher ratings for the class B-1, B-2, C, D, and E notes, our rating actions consider additional sensitivity runs that allowed for volatility in the underlying portfolio given that the transaction is still in its reinvestment period.

On a standalone basis, the results of the cash flow analysis indicated a lower rating on the class F notes than today's rating action suggests. However, we believe that as the transaction enters its amortization period following the end of its reinvestment period, it may begin to pay down the rated notes sequentially, starting with the class A notes, which, all else remaining equal, will begin to increase the overcollateralization levels. In addition, because the transaction currently has minimal exposure to 'CCC' rated collateral obligations and no exposure to long-dated assets (i. e., assets maturing after the CLO's stated maturity), we believe it is not currently exposed to large risks that would impair the current rating on the notes. In line with this, we affirmed the rating on the class F notes.

Our review of the transaction relied, in part, upon a criteria interpretation with respect to our May 2014 criteria, "CDOs: Mapping A Third Party's Internal Credit Scoring System To Standard & Poor's Global Rating Scale," which allows us to use a limited number of public ratings from other Nationally Recognized Statistical Rating Organizations (NRSROs) to assess the credit quality of assets not rated by S&P Global Ratings. The criteria provide specific guidance for the treatment of corporate assets not rated by S&P Global Ratings, while the interpretation outlines the treatment of securitized assets.

The assigned rating and rating affirmations reflect our opinion that the credit support available is commensurate with the associated rating levels.

We will continue to review whether, in our view, the ratings assigned to the notes remain consistent with the credit enhancement available to support them, and we will take rating actions as we deem necessary.