KBRA UK assigned preliminary ratings to seven classes of notes issued by RRE 20 Loan Management DAC, a cash flow collateralized loan obligation (CLO) backed primarily by a diversified portfolio of Euro-denominated corporate loans.
RRE 20 Loan Management DAC is managed by Redding Ridge Asset Management (RRAM) UK. The CLO will have a 4.7-year reinvestment period and a 13-year legal final. The ratings reflect initial credit enhancement levels, coverage tests including par value and interest coverage tests, excess spread and a reinvestment overcollateralization test.
The collateral in RRE 20 Loan Management DAC will mainly consist of broadly syndicated leveraged loans and bonds issued by corporate obligors diversified across sectors. The target portfolio par amount is €400 ($432.8) million with exposures to 98 obligors. The obligors in the portfolio have a K-WARF of 2632, which represents a weighted average portfolio assessment of approximately B.
