DBRS Morningstar Assigns Provisional Ratings to the Funded Class B-1 Loans, Funded Class B-2 Loans, and Funded C Loans to be Issued by NPC Funding IX, Ltd.

DBRS, Inc. (DBRS Morningstar) assigned the following provisional ratings to the Funded Class B-1 Loans, Funded Class B-2 Loans, and Funded C Loans (together, the Loans) to be issued by NPC Funding IX, Ltd. (the Borrower), pursuant to the Revolving Loan Agreement, dated as of July 30, 2021, and amended pursuant to the First Amendment to the Revolving Loan Agreement, dated as of September 30, 2021, by and among NPC Funding IX Ltd., as Borrower; Bighorn V, Ltd., as CLO I Subsidiary; First Eagle Alternative Credit, LLC, as Collateral Manager; U.S. Bank National Association (rated AA (high) with a Stable trend by DBRS Morningstar), as Collateral Custodian; Royal Bank of Canada (rated AA (high) with a Stable trend by DBRS Morningstar), as Administrative Agent and Revolving Lender; and the Lenders from time to time party thereto:

-- Funded Class B-1 Loans at BBB (low) (sf)
-- Funded Class B-2 Loans at BB (low) (sf)
-- Funded Class C Loans at BB (low) (sf)

The above provisional ratings address the ultimate payment of interest (excluding the Subordinated Loan Interest Amount as defined in the Amendment to the Revolving Loan Agreement (RLA)), and the ultimate payment of principal on or before the Facility Maturity Date of October 27, 2031. For the avoidance of doubt, the ratings do not address the repayment of the Cure Amounts (as defined in the amended RLA).

The Loans will be collateralized primarily by a portfolio of U.S. broadly syndicated corporate loans. First Eagle Alternative Credit, LLC will be the Collateral Manager for this transaction.

The provisional ratings reflect the following primary considerations:

-- The amended RLA, dated as of September 30, 2021.
-- The integrity of the transaction structure.
-- DBRS Morningstar’s assessment of the portfolio quality.
-- Adequate credit enhancement to withstand DBRS Morningstar’s projected collateral loss rates under various cash flow-stress scenarios.
-- DBRS Morningstar’s assessment of the origination, servicing, and CLO management capabilities of First Eagle Alternative Credit, LLC.

As of the date of the provisional ratings, DBRS Morningstar performed a telephone operational risk review of First Eagle Alternative Credit, LLC. DBRS Morningstar did not perform an on-site operational risk review of First Eagle Alternative Credit, LLC at their offices because of the current Coronavirus Disease (COVID-19) pandemic. DBRS Morningstar found First Eagle Alternative Credit, LLC to be an acceptable collateral manager.

A provisional rating is not a final rating with respect to the above-mentioned Loans and it may change or be different from the final rating assigned or may be discontinued. The assignment of final ratings on the above-mentioned Loans is subject to receipt by DBRS Morningstar of all data and/or information and final documentation that DBRS Morningstar deems necessary to finalize the ratings for these instruments, including satisfaction of the DBRS Morningstar Effective Date Condition (as defined in the RLA). The Borrower’s failure to complete the above conditions, as described in the RLA, may result in the provisional ratings not being finalized or the finalized ratings being different from the assigned provisional ratings.

ESG CONSIDERATIONS
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 methodology is Rating CLOs and CDOs of Large Corporate Credit (February 8, 2021), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

The DBRS Morningstar Sovereigns group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenario in the following report: https://www.dbrsmorningstar.com/research/384150.

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

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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