S&P: OHA Loan Funding 2013-2 Ltd. Ratings Raised On Two Classes; One Rating Affirmed
Today's rating actions follow our review of the transaction's performance, using data from the Aug. 1, 2016, trustee report. The transaction is scheduled to remain in its reinvestment period until August 2017.
The transaction has benefited from collateral seasoning, with the reported weighted average life decreasing to 4.71 years from 5.53 years in December 2013. This seasoning, combined with the improved credit quality, has decreased the overall credit risk profile, which, in turn, provided more cushion to the tranche ratings.
Collateral with a S&P Global Ratings' credit rating of 'BB-' or higher has significantly increased from the amount reported in the Dec. 1, 2013, effective date report used for our previous review.
Though there has been a modest increase in assets rated in the 'CCC' category, this is offset by the decline in the weighted average life and positive credit migration of the collateral portfolio.
Although our cash flow analysis indicated higher ratings for the class B and C notes, our rating actions consider additional sensitivity runs that considered the exposure to specific distressed industries and allowed for volatility in the underlying portfolio given that the transaction is still in its reinvestment period.
The affirmation of the rating on the class A notes reflects our belief that the credit support available is commensurate with the current 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 will take rating actions as we deem necessary.