DBRS Confirms Ratings on the Notes Issued by Salus CLO 2012-1, Ltd.

DBRS, Inc. (DBRS) has today confirmed the notes issued by Salus CLO 2012-1, Ltd., pursuant to the Salus CLO 2012-1, Ltd. Second Amended and Restated Indenture (Indenture) dated as of June 3, 2015.

The ratings on the Class A-2-X Notes and the Class B Notes address the timely payment of interest and the ultimate payment of principal on or before their respective Stated Maturity (as defined in the Indenture). The ratings on the Class C-X Notes, the Class D-X Notes and the Class E-X Notes address the ultimate payment of interest and the ultimate payment of principal on or before their respective Stated Maturity (as defined in the Indenture).

The notes issued by Salus CLO 2012-1, Ltd. are collateralized by a portfolio of primarily senior secured middle-market loans originated by Salus Capital Partners, LLC (Salus), a subsidiary of Harbinger Group, Inc. Salus Capital Partners II, LLC, a subsidiary of Salus, acts as the collateral manager for Salus CLO 2012-1 Ltd.

The ability of the transaction to pay the current interest on the Class A-2-X Notes and Class B Notes depends on the sustainability of interest payments from the performing loans and the timing of recoveries on previously defaulted loans. While DBRS does not currently foresee a disruption in the payment of timely interest to these notes, further deterioration of the remaining collateral or significantly delayed recovery realization could affect timely interest payments on the Class A-2-X and Class B Notes going forward. DBRS will continue to monitor the performance of the portfolio and the realization of recoveries as compared with expectations.

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

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

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.