Fitch Ratings has affirmed the class A notes issued by KVK CLO 2013-1 (KVK CLO 2013-1) at 'AAAsf'. The Rating Outlook remains Stable.
KEY RATING DRIVERS
The affirmation is based on the stable performance of the underlying portfolio since the transaction's inception in
The loan portfolio par amount plus principal cash is approximately
The transaction has two concentration limitations (as defined by either Moody's default probability ratings or S&P ratings) to address permitted exposure to 'CCC' rated collateral. Each concentration limitation has a 5 percent permissible 'CCC' bucket. The trustee currently reports 4.4 percent of the portfolio as rated 'Caa1' or below by Moody's and 1.2 percent of the portfolio as rated 'CCC+' or below by S&P. Fitch currently considers 5.8 percent of the portfolio (excluding cash) to be rated in the 'CCC' category, based upon Fitch's Issuer Default Rating (IDR) Equivalency Map.
The ratings of the notes may be sensitive to the following: asset defaults, portfolio migration, including assets being downgraded to 'CCC', portions of the portfolio being placed on Rating Watch Negative, overcollateralization (OC) or interest coverage (IC) test breaches, or breach of concentration limitations or portfolio quality covenants. Fitch conducted rating sensitivity analysis on the closing date of KVK CLO 2013-1, incorporating increased levels of defaults and reduced levels of recovery rates, among other sensitivities.
KVK CLO 2013-1 is an arbitrage, cash flow collateralized loan obligation (CLO) managed by
This review was conducted under the framework described in the report 'Global Rating Criteria for Corporate CDOs' using the Portfolio Credit Model (PCM) for projecting future default and recovery levels for the underlying portfolio. Given the stable performance of the deal since closing in
The rating of the KVK CLO 2013-1 class A notes is not expected to experience rating volatility in the near term, supporting its Stable Outlook.
Initial Key Rating Drivers and Rating Sensitivity are further described in the New Issue Report published on
Fitch has affirmed the following rating:
Additional information is available at 'fitchratings.com'.
The sources of information used to assess these ratings was sourced from periodic servicer reports, note valuation reports and the public domain.
--'Global Structured Finance Rating Criteria' (
--'Global Rating Criteria for Corporate CDOs' (
--'Counterparty Criteria for Structured Finance and Covered Bonds' (
--'KVK CLO 2013-1 Ltd.' (
--'KVK CLO 2013-1 Ltd. ' Appendix' (
Global Structured Finance Rating Criteria
Global Rating Criteria for Corporate CDOs
Counterparty Criteria for Structured Finance and Covered Bonds
KVK CLO 2013-1 Ltd.
KVK CLO 2013-1 Ltd. -- Appendix
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Fitch Ratings has affirmed the class A notes issued by KVK CLO 2013-1 (KVK CLO 2013-1) at 'AAAsf'.
The Rating Outlook remains Stable.