DBRS Morningstar Finalizes Provisional Ratings on the Funded Class B-1 Loans, Funded Class B-2 Loans, and Funded Class C Loans of NPC Funding IX, Ltd.

DBRS, Inc. (DBRS Morningstar) finalized the following provisional ratings on the Funded Class B-1 Loans, the Funded Class B-2 Loans, and the Funded Class C Loans (together, the Loans) issued by NPC Funding IX Ltd., pursuant to the Revolving Loan Agreement, dated as of July 30, 2021, as amended pursuant to the First Amendment to the Revolving Loan Agreement, dated as of September 30, 2021, and amended pursuant to the Second Amendment to the Revolving Loan Agreement, dated as of March 18, 2022, by and among NPC Funding IX Ltd., as Borrower; First Eagle Alternative Credit, LLC (First Eagle), as Collateral Manager; U.S. Bank, N.A., as Collateral Custodian; Royal Bank of Canada, as Administrative Agent and Revolving Lender; the Lenders and the collateralized loan obligation (CLO) Subsidiary from time to time 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 ratings address the ultimate payment of interest (excluding the Subordinated Loan Interest Amount as defined in the amended Revolving Loan Agreement) and the ultimate payment of principal on or before the Facility Maturity Date (as defined in the amended Revolving Loan Agreement). For the avoidance of doubt, the ratings do not address the repayment of the Cure Amounts (as defined in the amended Revolving Loan Agreement).

The Loans are collateralized primarily by a portfolio of U.S. broadly syndicated corporate loans. First Eagle is the Collateral Manager for this transaction. DBRS Morningstar considers First Eagle to be an acceptable CLO collateral manager.

The ratings reflect the following primary considerations:
-- The Revolving Loan Agreement, as amended from time to time.
-- 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.

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.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no environmental, social, or governance factors that had a significant or relevant effect on the credit analysis.

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/396929.

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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