Fitch Ratings Upgrades Sankaty High Yield Asset Partners, L.P.
--$30,000,000 senior secured revolving credit 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 (CDO) 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 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 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 www.fitchratings.com.
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|Date:||Jan 14, 2005|
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