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Fitch Ratings Upgrades Sankaty High Yield Asset Partners, L.P.

NEW YORK New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 -- Fitch Ratings Fitch Ratings

An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris.
 upgrades all of the rated notes issued by Sankaty High Yield Asset Partners, L.P. (Sankaty). The following rating actions are effective immediately:

--$30,000,000 senior secured revolving credit Revolving Credit

A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs.
 facility to 'A+' from 'A;'

-- $85,000,000 senior secured notes to 'A+' from 'A;'

-- $67,500,000 senior subordinated secured notes to 'BBB+' from 'BBB;'

-- $22,500,000 subordinated secured notes to 'BB+' from 'BB.'

Sankaty, a market value collateralized debt obligation Collateralized Debt Obligation (CDO)

A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations,
 (CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the ) that closed on Jan. 15, 1998, is managed by Sankaty Advisors, L.L.C. (Sankaty Advisors). The fund was established to invest in a portfolio of senior secured bank loans, high yield bonds, and mezzanine mez·za·nine  
1. A partial story between two main stories of a building.

2. The lowest balcony in a theater or the first few rows of that balcony.
 and special situation investments.

Since the last rating action on Sept. 5, 2003, the fund has showed significant improvement. The overcollateralization (OC) tests for the senior, senior subordinated, and subordinated notes have increased to 213.5%, 151%, and 140.3% as of the Dec. 16, 2004, valuation report, from 178.7%, 124.9%, and 115.8% as of the July 24, 2003, valuation report. Additionally, the total illiquid Illiquid

An asset or security that cannot be converted into cash very quickly (or near prevailing market prices).

A house is a good example of an illiquid asset.
See also: Cash, Liquidity


In the context of finance.
 assets as a percentage of the market value of the assets has decreased from 26.6% to 15%. Several of the illiquid positions have call options prior to the legal final maturity of Sankaty.

Fitch performed discounted market value analysis at varying advance rate stresses and determined that the notes were well covered under various discounted collateral scenarios. After discussing the current state of the portfolio with Sankaty Advisors, Fitch believes the asset manager is managing toward its Dec. 30, 2005, and Jan. 31, 2006, maturity dates. Fitch will continue to monitor Sankaty closely to ensure accurate ratings.

Based on the cushion of the OC tests, the credit quality of the portfolio and the track record and experience of Sankaty Advisors in the high yield loan, mezzanine and special situation asset classes, Fitch has determined that the ratings assigned to the senior secured revolving credit facility, the senior secured notes, the senior subordinated secured notes, and the subordinated secured notes no longer reflect the current risk to noteholders and have subsequently improved.

Additional deal information and historical data are available on the Fitch Ratings web site at
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Publication:Business Wire
Date:Jan 14, 2005
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