DBRS Confirms Ratings on Class A-R Loans and Assigns New Rating to Class A-T Loans Issued by Brightwood Capital Fund III SPV, LLC

DBRS, Inc. (DBRS) has today confirmed the rating of AA (sf) on the Class A-R Loans (formerly known as the Loans) up to the Total Class A-R Commitment of $150,000,000 and has assigned a new rating of AA (sf) to the Class A-T Loans up to the Total Class A-T Commitment of $100,000,000 issued by Brightwood Capital Fund III SPV Holdings, LLC.

The Class A-R Loans and Class A-T Loans were issued pursuant to the Second Amended and Restated Credit Agreement dated as of December 16, 2015, among Brightwood Capital Fund III Holdings SPV, LLC as Borrower; Natixis, New York Branch as Administrative Agent for the Lenders; Brightwood Capital Fund III Holdings, LP as Administrative Agent for the Subordinated Noteholders; and U.S. Bank National Association as Collateral Agent and Custodian and the Lenders and Subordinated Noteholders thereto.

The DBRS rating addresses the timely payment of interest and ultimate payment of principal on or before the Loan Stated Maturity Date (as defined in the Second Amended and Restated Credit Agreement referred to above).

The rating actions were taken to reflect the impact of the execution of the Second Amended and Restated Credit Agreement dated as of December 16, 2015. The amended language includes mechanics to rename the Loans to the Class A-R Loans, issue the Class A-T Loans and amend the Concentration Limitations. 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) Second Amended and Restated Credit Agreement dated as of December 16, 2015.

(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 Brightwood Capital Fund III Holdings, LP

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.

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

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

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

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