DBRS Morningstar Confirms Ratings on the Class A-R Loans and Class A-T Loans of ABPCIC Funding III LLC

DBRS, Inc. (DBRS Morningstar) confirmed its ratings of AA (sf) on both the Class A-R Loans and the Class A-T Loans (together, the Class A Loans) issued by ABPCIC Funding III LLC, pursuant to the Credit Agreement dated as of March 24, 2021 (as amended by Amendment No. 1 to the Credit Agreement, dated as of July 1, 2021; Amendment No. 2, dated as of November 5, 2021; Amendment No. 3, dated as of February 7, 2022; and Amendment No. 4, dated as of March 7, 2022) (the Credit Agreement), among ABPCIC Funding III LLC, as the Borrower; Natixis, New York Branch, as the Administrative Agent; U.S. Bank National Association, as the Collateral Agent, Collateral Administrator, and Custodian; and the Lenders referred to therein.

The ratings on the Class A Loans address the timely payment of interest up to the Interest Rate Cap (as defined in the Credit Agreement) and the ultimate payment of principal on or before the Stated Maturity (as defined in the Credit Agreement).

The Class A Loans are collateralized primarily by a portfolio of U.S. middle-market corporate loans and other corporate obligations. AB Private Credit Investors LLC (ABPCI), an affiliate of AllianceBernstein L.P., manages ABPCIC Funding III LLC. DBRS Morningstar considers ABPCI to be an acceptable collateralized loan obligation (CLO) manager.

The ratings reflect the following primary considerations:

(1) Amendment No.4 to the Credit Agreement, dated as of March 7, 2022.
(2) The Credit Agreement dated as of March 24, 2021, as amended from time to time.
(3) The integrity of the transaction structure.
(4) DBRS Morningstar’s assessment of the portfolio quality.
(5) Adequate credit enhancement to withstand projected collateral loss rates under various cash flow stress scenarios.
(6) DBRS Morningstar’s assessment of the origination, servicing, and CLO management capabilities of ABPCI.

To assess portfolio credit quality, DBRS Morningstar provides a credit estimate or internal assessment for each nonfinancial corporate obligor in the portfolio not rated by DBRS Morningstar. Credit estimates are not ratings; rather, they represent a model-driven default probability for each obligor that is used in assigning ratings to a facility.

For more information regarding DBRS Morningstar’s additional adjustment for select industries related to the Coronavirus Disease (COVID-19), please see its May 18, 2020, commentary, “CLO Risk Exposure to the Coronavirus Disease (COVID-19)” at https://www.dbrsmorningstar.com/research/361112.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodologies are Rating CLOs and CDOs of Large Corporate Credit (January 26, 2022) and Cash Flow Assumptions for Corporate Credit Securitizations (January 26, 2022), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar 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.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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