KBRA assigns ratings to two classes of additional notes issued by Deerpath Newbury Partners LLC (Deerpath Newbury). KBRA is also affirming each of the original notes. The rating actions follow KBRA’s analysis which indicates that cash flows are sufficient to support the outstanding ratings following the issuance of the additional notes.

Deerpath Newbury is a delayed-draw cash flow collateralized loan obligation (CLO) managed by Deerpath Capital Management, LP and backed primarily by middle market senior secured loans. The transaction originally closed in December 2020 and had all ratings affirmed in December 2021. The additional issuance will increase the total transaction size from $73.0 million to $90.0 million.

The collateral in Deerpath Newbury currently consists of middle market leveraged loans issued by corporate obligors diversified across sectors. The obligors in the portfolio have a K-WARF of 3053, which represents a weighted average assessment of approximately B-. The total portfolio par amount is $72.8 million with exposure to 51 obligors. As of the most recent trustee report, the collateral quality matrix, collateral quality tests, concentration limitations, and coverage tests were passing. There were no defaulted or discount obligations reported.

Deerpath Capital Management, LP is a non-bank lending institution and middle market CLO collateral manager founded in 2007. Since 2009, Deerpath has deployed over $5.6 billion in capital across 630 investments. The management team has a strong track record and an investment strategy which focuses on originating low-levered first lien senior secured loans to sponsor-backed borrowers.

KBRA’s ratings on the Class A-1 and A-2 notes consider timely payment of interest and ultimate payment of principal by the applicable stated maturity date. KBRA’s ratings on the Class B-1 and B-2 notes consider ultimate payment of interest and principal by the applicable stated maturity date.

In performing the rating analysis, KBRA utilized its Structured Credit Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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