Ratings Assigned To Two Classes From LCM XIX Ltd. Partnership In Connection With Refinancing

  • LCM XIX L.P./LCM XIX LLC refinanced its class A and B notes on April 15, 2019, through an optional redemption and replacement note issuance.
  • We withdrew our ratings on the original class A and B notes following payment in full on the April 15, 2019, refinancing date.
  • After analyzing the changes to the transaction, we assigned our ratings to the replacement class A-R and B-R notes.
  • We also affirmed our ratings on the original class C, D, E-1, and E-2 notes.
  • The assigned ratings reflect our opinion that the credit support available is commensurate with the associated rating levels.
NEW YORK (S&P Global Ratings) April 15, 2019--S&P Global Ratings today 
assigned its ratings to the class A-R and B-R replacement notes from LCM XIX 
L.P./LCM XIX LLC, a collateralized loan obligation (CLO) originally issued in 
2015 that is managed by LCM Asset Management LLC. We withdrew our ratings on 
the original class A and B notes following payment in full on the April 15, 
2019, refinancing date. At the same time, we affirmed our ratings on the class 
C, D, E-1, and E-2 notes.

On the April 15, 2019, refinancing date, the proceeds from the class A-R and 
B-R replacement note issuances were used to redeem the original class A and B 
notes as outlined in the transaction document provisions. Therefore, we 
withdrew our ratings on the original notes in line with their full redemption, 
and we assigned ratings to the replacement notes.

The ratings reflect our opinion that the credit support available is 
commensurate with the associated rating levels. In conjunction with the 
refinancing, the spread of the class A-R notes was reduced from 1.47% to 1.24% 
above LIBOR, and the spread of the class B-R notes was reduced from 2.00% to 
1.75% above LIBOR.

Our review of this transaction included a cash flow analysis, based on the 
portfolio and transaction as reflected in the trustee report, to estimate 
future performance (see table). In line with our criteria, our cash flow 
scenarios applied forward-looking assumptions on the expected timing and 
pattern of defaults, and recoveries upon default, under various interest rate 
and macroeconomic scenarios. In addition, our analysis considered the 
transaction's ability to pay timely interest or ultimate principal, or both, 
to each of the rated tranches. 

Table
Replacement And Original Note Issuances

Class                Amount (mil. $)   Interest rate (%)
Replacement notes
  A-R                         363.00        LIBOR + 1.24
  B-R                          81.00        LIBOR + 1.75
Original notes
  A                           363.00        LIBOR + 1.47
  B                            81.00        LIBOR + 2.00

The assigned ratings also reflect our opinion that the credit support 
available is commensurate with the associated rating levels.

We will continue to review whether the ratings assigned to the notes remain 
consistent with the credit enhancement available to support them, and we will 
take further rating actions as we deem necessary.

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