DBRS Confirms and Assigns AA (sf) Rating to the Notes issued by Whitehorse Finance Warehouse, LLC

DBRS, Inc. (“DBRS”) has today changed the title of the rated security issued by WhiteHorse Finance Warehouse, LLC from “Facility” to “Revolving Notes” and has confirmed and assigned ratings of AA (sf) to the Revolving Notes and Term Notes (collectively, the “Notes”), issued by WhiteHorse Finance Warehouse, LLC, up to the Total Commitment of $150,000,000 pursuant to the Amended and Restated Credit and Security Agreement, dated as of August 13, 2014. The Notes are collateralized primarily by a portfolio of U.S. middle market corporate loans and other corporate obligations. WhiteHorse Finance Warehouse, LLC is managed by WhiteHorse Finance, Inc., an affiliate of H.I.G. Capital, LLC. The DBRS ratings address WhiteHorse Finance Warehouse, LLC’s ability to make timely payments of interest and ultimate payment of principal on or before the Final Maturity Date (as defined in the Amended and Restated Credit and Security Agreement referred to above).

The rating actions were taken to reflect the impact of the execution of the Amended and Restated Credit Security Agreement dated as of August 13, 2014. The amended language included extension of the Reinvestment Period 6 months to March 27, 2015, with the option to extend another 6 months to September 27, 2015 and extension of the Final Maturity Date 1 year to September 27, 2021. The amendment also included mechanics for the Revolving Notes to be converted into Term Notes upon the Mandatory Revolving Conversion Dates. Lastly, the amendment also allows for Increased Commitment and Additional Advances to be issued at a later date, increases the MV Overcollateralization Ratio Test to 350% from 300%, and amends the Concentration Limitations to increase the exception thresholds of the Obligor and Industry buckets, among other changes. The execution of the proposed amendment will not in and of itself result in the ratings being downgraded or discontinued. The rating confirmation by DBRS does 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 rating actions reflect the following:

(1) Amended and Restated Credit and Security Agreement, dated as of August 13, 2014.

(2) The integrity of the transaction structure.

(3) DBRS’s assessment of the portfolio quality.

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

(5) DBRS’s assessment of the origination, servicing and CLO management capabilities of WhiteHorse Finance, Inc.

To assess portfolio credit quality, DBRS provides a credit estimate or internal assessment for each non-financial corporate obligor in the portfolio, not rated by DBRS. Credit estimates are not ratings; rather they represent a model-driven default probability for each obligor that is used in assigning a rating to the Notes.

The principal methodology is Rating Methodology for CLOs and CDOs of Large Corporate Credit, which can be found on our website under Methodologies.

This credit rating has been issued outside the European Union (EU) and may be used for regulatory purposes by financial institutions in the EU.

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

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.