DBRS Confirms Ratings on Notes Issued by TCP Rainier, LLC

DBRS, Inc. (DBRS) confirmed the ratings of A (low) (sf) on the Class A Notes, BBB (sf) on the Class B Notes and BB (sf) on the Class C Notes (collectively, the Notes) and confirmed the provisional rating of BBB (low) (sf) on the Combination Notes issued by TCP Rainier, LLC (TCP or the Issuer), pursuant to the Note Purchase and Security Agreement (NPSA) dated as of December 11, 2018 (and as further amended by the First Amendment (the Amendment) dated as of July 2, 2019, and effective as of July 25, 2019), among TCP as Issuer; U.S. Bank National Association (USB; rated AA (high) with a Stable trend by DBRS) as Collateral Agent, Custodian, Document Custodian, Collateral Administrator, Information Agent and Note Agent; and the Purchasers referred to therein.

The rating on the Class A Notes addresses the timely payment of interest (excluding the additional 1% of interest payable at the Post-Default Rate as defined in the NPSA) and the ultimate payment of principal on or before the Stated Maturity of December 11, 2026. The ratings on the Class B Notes and Class C Notes address the ultimate payment of interest (excluding the additional 1% of interest payable at the Post-Default Rate as defined in the NPSA) and the ultimate payment of principal on or before the Stated Maturity of December 11, 2026. The provisional rating on the Combination Notes addresses the ultimate repayment of the Combination Note Rated Principal Balance (as defined in the NPSA) on or before the Stated Maturity of December 11, 2026.

The ratings on the aforementioned Notes are being confirmed pursuant to the execution of the Amendment dated as of July 2019 and effective as of July 25, 2019 (the First Amendment Date), among the Issuer; Series I of SVOF/MM, LLC as the Collateral Manager and Purchaser; Security Benefit Life Insurance Company as Purchaser; and USB as Collateral Agent, Custodian, Document Custodian, Collateral Administrator, Information Agent and Note Agent.

The Notes will be collateralized primarily by a portfolio of U.S. middle-market corporate loans. The Issuer is managed by Series I of SVOF/MM, LLC, a consolidated subsidiary of Tennenbaum Capital Partners, LLC, which is itself a wholly owned subsidiary of BlackRock, Inc.

The Combination Notes consist of a portion of the principal amount (the Components) of each of the Class A Notes, Class B Notes, Class C Notes and Subordinated Notes (the Underlying Classes). Each Component of the Combination Notes will be treated as notes of the respective Underlying Class. Payments on any Underlying Class shall be allocated to the relevant Combination Notes in the proportion that the outstanding principal amount of the applicable Component bears to the outstanding principal amount of such Underlying Class as a whole (including all related Components). Each Component of the Combination Notes shall bear interest and shall receive payments in the same manner as the related Underlying Class, and each Component shall mature and be payable on the Stated Maturity in the same manner as the related Underlying Class.

All payments made on the Combination Notes (interest, principal or otherwise) shall reduce the Combination Note Rated Principal Balance of the Combination Notes, provided that the Combination Notes shall remain outstanding until the earlier of (1) the payment in full and redemption of each Component or (2) the Stated Maturity of each Component.

The confirmation of the ratings reflects the following:

(1) The NPSA dated as of December 11, 2018, and as further amended by the Amendment, which will become effective as of July 25, 2019.
(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 collateralized loan obligation management capabilities of Series I of SVOF/MM, LLC.

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 facility.

Under the NPSA, following an Event of Default and the acceleration of the Obligations, the Controlling Parties (as defined in the NPSA) may direct the Collateral Agent to sell all or any portion of the Collateral to the Controlling Parties or any Affiliate of the Controlling Parties, without soliciting or accepting bids therefore from any Person, at the Market Value of such Collateral, which may be at the disadvantage of the other non–Controlling Parties.

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

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.

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

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