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Moody's Investors Service Inc.

Moody's Maintains Ratings for Newfoundland CLO I Limited's Notes

Strategic Insights

— 1 min read

Moody's Investors Service has issued a report stating that the proposal to partially redeem certain notes and extend the reinvestment period for Newfoundland CLO I Limited's notes would not result in a downgrade or review for possible downgrade at this time. The report emphasizes that the credit risk of the notes has been measured using Moody's CDO Edge model, which incorporates the CLO's structural features. The report also highlights the planned use of proceeds from the amortization of portfolio assets, which would reduce the portfolio par to USD 10,000M.

Key Takeaways:

  • Moody's has announced that the proposed amendment to the notes issued by Newfoundland CLO I Limited would not result in a downgrade or review for possible downgrade at this time.
  • The CLO is a balance sheet cash flow CLO managed by Barclays Bank PLC and backed by a portfolio of senior secured and unsecured loans denominated in USD.
  • The proposed amendment includes the partial redemption of the Class A-1 and A-2 notes, as well as the Class B-1 and B-2 notes.
  • The portfolio par will be reduced to USD 10,000M following the partial redemption of the notes using proceeds from the amortization of portfolio assets.
  • Moody's has measured the credit risk of the CLO's notes using the CDO Edge model, which incorporates the CLO's structural features.
  • The report notes that the proposed amendment is expected to be implemented on or about 20 June 2025.

Statistics:

  • The Class A-1 notes to be redeemed total USD 4,998,000,000.
  • The Class A-2 notes to be redeemed total USD 2,622,000,000.
  • The Class B-1 notes to be redeemed total USD 374,119,000.
  • The Class B-2 notes to be redeemed total USD 705,881,000.
  • The unrated Class C-1 subordinated notes total USD 650,000,000.
  • The unrated Class C-2 subordinated notes total USD 650,000,000.
  • The current portfolio par is not explicitly stated in the report.
  • The USD 10,000M portfolio par following the partial redemption is expected to be achieved using proceeds from the amortization of portfolio assets.

Sources:

  • Moody's Investors Service
  • "Moody's Global Approach to Rating Collateralized Loan Obligations" published in May 2024, available at https://ratings.moodys.com/rmc-documents/420962.
  • Moody's website: https://ratings.moodys.com for a copy of this methodology.
  • "Rating Methodologies" page on https://ratings.moodys.com.

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