DBRS Confirms Ratings on the Class A-R Loans and Class A-T Loans of Garrison Middle Market Funding II Primary LP and Garrison Middle Market Funding II Secondary LP

DBRS, Inc. (DBRS) confirmed its ratings of AA (sf) on the Class A-R Loans and the Class A-T Loans (together, the Loans) issued by Garrison Middle Market Funding II Primary LP and Garrison Middle Market Funding II Secondary LP, acting through the General Partner, Garrison Middle Market Funding II CLO Ltd. up to the Total Class A-R Commitment of $125,000,000 and Total Class A-T Commitment of $75,000,000, respectively.

The Loans were issued pursuant to the Credit Agreement dated as of April 5, 2018, among Garrison Middle Market Funding II Primary LP, as Primary Borrower; Garrison Middle Market Funding II Secondary LP, as Secondary Borrower; Garrison Middle Market Funding II CLO Ltd., as General Partner; Natixis, New York Branch, as Administrative Agent; U.S. Bank National Association (rated AA (high) with a Stable trend by DBRS), as Collateral Agent and Custodian; and the Lenders referred to therein.

The confirmation of the ratings on the Loans reflects the revised Collateral Quality Matrix (as defined in the Credit Agreement referred to above).

The ratings on the Loans address the timely payment of interest (excluding the Excess Interest Amounts) (as defined in the Credit Agreement referred to above) and the ultimate payment of principal on or before the Stated Maturity (as defined in the Credit Agreement referred to above).

The Loans will be collateralized primarily by a portfolio of U.S. middle-market, senior-secured corporate loans and other corporate obligations. Garrison Middle Market Funding II Manager LLC will act as the Collateral Manager. The Collateral Manager is an indirect wholly owned subsidiary of Garrison Investment Group LP.

The ratings reflect the following:

(1) The Credit Agreement dated April 5, 2018.
(2) The integrity of the transaction structure.
(3) DBRS’s assessment of the portfolio’s 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 collateralized loan obligations management capabilities of Garrison Middle Market Funding II Manager LLC.

To assess portfolio credit quality, DBRS provides a credit estimate or an 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 facility.

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

The principal methodology is Rating CLOs and CDOs of Large Corporate Credit, which can be found on dbrs.com
under Methodologies.

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

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

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