College Avenue Student Loans 2017-A LLC

Transcription

1 Presale: College Avenue Student Loans 2017-A LLC This presale report is based on information as of June 23, The ratings shown are preliminary. This report does not constitute a recommendation to buy, hold, or sell securities. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. Preliminary Ratings Class Preliminary rating(i) Preliminary amount (mil. $) Interest rate(ii) A-1 BBB (sf) One-month LIBOR plus a spread A-2 BBB (sf) Fixed B NR Fixed C NR Fixed (i)the rating on each class of securities is preliminary and subject to change at any time. (ii)the interest rates will be determined on the pricing date. NR--Not rated. Profile Expected closing date July 20, Collateral A pool of private student loans. Sponsor College Avenue Student Loans LLC. Seller College Ave Depositor LLC. Administrator College Ave Administrator LLC. Backup administrator Goal Structured Solutions Inc. Servicer University Accounting Service LLC. Backup servicer Pennsylvania Higher Education Assistance Agency. Master servicer College Ave Student Loan Servicing LLC. Trustee Wilmington Trust N.A. Primary Credit Analyst: Ronald G Burt, New York (1) ; ronald.burt@spglobal.com See complete contact list on last page(s) JUNE 23,

2 Profile (cont.) Grantor trust Owner trustee Underwriter College Ave Grantor Trust 2017-A. Wilmington Savings Fund Society FSB. Barclays Capital Inc. Rationale The preliminary 'BBB (sf)' ratings assigned to College Avenue Student Loans 2017-A LLC's (CASL 2017-A's) $138.8 million asset-backed class A notes reflect: The initial class A overcollateralization of approximately 16.8%. The class A overcollateralization is defined as the excess of the pool balance over the class A note balance, divided by the pool balance. The class A overcollateralization is comprised of approximately 6.5% class B and 6.8% class C subordination for the class A notes (defined as the note balances divided by the initial pool balance); and total overcollateralization of approximately 3.5% of the initial pool balance. The fully funded reserve account, which is maintained at 0.5% of the initial pool balance. The fully funded capitalized interest account, which equals 0.8% of the initial pool balance. The transaction's payment structure, which builds overcollateralization for the class A notes to the greater of 36.75% of the current pool balance or 2.00% of the initial pool balance ($3,334,440). The pool characteristics, including a weighted average FICO score of 763 at the time of the loan application and co-borrowers on 90.2% of the loans. The timely interest and principal payments by the final maturity dates made in the cash flow runs that simulated our 'BBB' rating stress scenario. A scenario analysis, which indicates that under moderately stressful economic conditions, the preliminary 'BBB (sf)' ratings would not decline more than two rating categories in the first year, which is consistent with our credit stability criteria. The transaction's legal structure. Key Rating Considerations Based on our review of College Avenue's operations and performance history, we considered the following strengths for this transaction: The loan pool obligors' high credit quality in terms of credit score. College Avenue's management team, which has significant prior experience in the private student loans sector. University Accounting Services LLC's, the servicer, and Pennsylvania Higher Education Assistance Agency's, the backup servicer, track record and experience servicing private student loans. Despite these strengths, we believe that the following limitations, as a whole, weigh against assigning a preliminary rating above 'BBB (sf)' to the CASL 2017-A transaction: College Avenue's limited operating history; The limited available historical collateral performance data; and College Ave Student Loan Servicing LLC's limited experience as a master servicer of private student loans. JUNE 23,

3 Transaction Summary The issuer expects to use the transaction's proceeds to acquire approximately $166,721,999 (as of May 16, 2017) of private student loans. These loans are not guaranteed or reinsured under the Federal Family Education Loan Program (FFELP) or any other federal student loan program. They were underwritten and originated under the College Avenue Private Education Loan Program to provide private funding for students enrolled in traditional four-year programs (98.7% of the pool) and two/three-year programs (1.2% of the pool). CASL 2017-A incorporates the following structural features: One floating-rate LIBOR class (class A-1), which represents approximately 59% of the total issuance, and three fixed-rate classes (classes A-2, B, and C), which represent approximately 27%, 7%, and 7%, respectively, of the total issuance. S&P Global Ratings is not rating the class B or C notes. Approximately 69% of the collateral is indexed to floating-rate LIBOR, and approximately 31% of the collateral bears interest at a fixed rate. Overcollateralization for the class A notes, which is expected to reach 36.75% of the current pool balance (subject to a floor equal to 2.00% of the initial pool balance). After meeting this target, the transaction structure pays principal to the class B and C notes (subject to overcollateralization targets), certain fees and expenses to the servicer, trustees, listing agent, and administrator. If any funds remain after these payments, they will be released to the residual certificateholders. At closing, the trust will use a portion of the notes' proceeds to deposit $833,610 (0.50% of the initial pool balance) into a reserve account, which will be maintained at 0.50% of the initial pool balance. The trust may replenish the reserve account balance to the required level on each distribution date if any funds remain after the first six items in the payment waterfall are paid. The funds in the reserve account will generally be available to pay items one through 10 of the payment waterfall and the notes' principal on the legal final maturity dates. At closing, the trust will use a portion of the notes' proceeds to deposit $1,333,776 (0.80% of the initial pool balance) into a capitalized interest account. The funds in the capitalized interest account will generally be available to pay senior transaction fees and interest on the notes. On the August 2019 monthly payment date, any remaining amounts in the capitalized interest account will be distributed as part of available funds. At closing, the transaction's class A parity will be approximately 122%. (Class A parity is defined as the sum of the pool balance, the reserve account balance, and the capitalized interest account balance divided by the class A note principal amount.) Payment Structure Class A-1 has a floating rate indexed to one-month LIBOR, and the class A-2, B, and C notes are fixed-rate notes. The trust will make payments on the notes from collections on a pool of private student loans on the 25th day of each month or the following business day beginning September The trust will make the payments in a specified priority (see table 1). The payment priority is initially sequential, paying principal to classes A, B, and C until each class reaches a specified target overcollateralization. Thereafter, the payment priority will continue to pay principal on a pro rata basis if the target overcollateralization amounts are maintained. The pro rata principal payment priority allows the dollar value of the class B and C subordination to decline over time, providing less support to the class A notes. This is in contrast to a sequential principal payment priority where initial subordination would not amortize. There are also JUNE 23,

4 priority principal distribution amounts to the class A and B notes that are paid if there is an imbalance between the outstanding debt and asset balance. If the test is breached, the interest payments to the more subordinate classes will be subordinate to the more-senior classes' principal payments until the imbalance is resolved. Table 1 Payment Waterfall Priority Payment 1 Senior transaction fees(i), including capped extraordinary expenses of trustee and owner trustee, pro rata. 2 Interest payments to the class A noteholders. 3 Class A first-priority principal distribution amount(ii), if any, to the class A-1 and A-2 notes, pro rata. 4 Interest payments to the class B noteholders. 5 Second-priority principal distribution amount(iii), if any, to the class A notes, pro rata, until paid in full, and then to the class B notes. 6 Interest payments to the class C noteholders. 7 If necessary, replenish the reserve account to the required level. 8 Class A regular principal distribution amount(iv) to the class A-1 and A-2 notes, pro rata. 9 Class B regular principal distribution amount(iv) to the class B notes. 10 Class C regular principal distribution amount(iv) to the class C notes. 11 Subordinate transaction fees(v), pro rata. 12 Any remaining amounts to the issuing trust to the residual certificateholders. (i)senior transaction fees include trustee fees of 0.015% per year, administration fees of 0.05% per year, servicing fees of 0.95% per year, owner trustee fee of $8,000 per year, other fixed fees totaling $21,000 per year, and extraordinary trustee expenses capped at $30,000 per year. (ii)the class A first-priority principal distribution amount is designed to use all funds remaining after the first two items of the payment waterfall are paid and will be used to repay the class A notes if the class A notes exceeds the pool balance less $250,000. (iii)the second-priority principal distribution amount is designed to use all funds remaining after the first four items of the payment waterfall are paid and will be used to repay class A notes and then the class B notes if the class A plus the class B notes exceed the pool balance less $250,000. (iv)the class A, B, and C regular principal distribution amounts are designed to build and maintain the target overcollateralization of 36.75%, 30.30%, and 23.50%, respectively, of the current pool balance with a floor of 2.0%, 1.5%, and 1.0% of the initial pool balance, respectively. (v)subordinate transaction fees include any extraordinary trustee expenses that are not payable as senior transaction fees capped at $100,000 per year, any extraordinary administrator expenses, and any extraordinary servicer expenses. Transaction Overview According to the indenture, CASL 2017-A (the issuer) will transfer a portion of the proceeds from the sale of the notes and the residual certificates to College Ave Grantor Trust 2017-A (the grantor trust) in exchange for the issuance of the grantor trust certificate. The issuing trust will be the sole beneficiary and equity owner of the grantor trust. According to a loan portfolio purchase and sale agreement, the grantor trust will use a portion of the proceeds received to acquire the loans from College Ave Depositor LLC (the seller). In rating this transaction, S&P Global Ratings will review the legal matters that it believes are relevant to its analysis as outlined in its criteria (see chart 1). JUNE 23,

5 Pool Analysis The noteholders will receive payments primarily from collections on a pool of private student loans (see table 2 for the CASL 2017-A initial pool's characteristics as of the May 16, 2017, statistical cut-off date). JUNE 23,

6 Table 2 Initial Pool Characteristics CASL 2017-A Cut-off date May 16, 2017 Aggregate outstanding principal balance (mil. $) Avg. outstanding principal balance per borrower ($) 16,112 Weighted avg. annual borrower rate on fixed rate loans (%) 9.07 Weighted avg. margin above one-month LIBOR on variable rate loans (%) 6.09 Weighted avg. remaining term to the scheduled maturity date (mos.) 140 Loans cosigned/non-cosigned (%) 90/10 Weighted avg. FICO 763 FICO distribution (%) and above 63.9 Total School type (%) Four-year institution 98.8 Two/three-year institution 1.2 Total School designation (%) For-profit 12.0 Not-for-profit 88.0 Total Original loan payment type (%) Deferred payment 42.0 $25 fixed payment 23.0 Interest-only payment 20.2 Full principal and interest 14.9 Total Current loan payment type (%) Deferred payment 40.5 $25 fixed payment 22.1 Interest-only payment 18.8 Full principal and interest 18.7 Total Loan interest rate (%) Floating (LIBOR) 68.7 Fixed 31.3 Total Borrower status (%) In school JUNE 23,

7 Table 2 Initial Pool Characteristics (cont.) CASL 2017-A Grace 12.6 Deferment 0.1 Forbearance 0.1 Repayment 7.8 Expected Default Rate: 14.0%-15.0% In sizing the cumulative expected default rates for the CASL 2017-A transaction, we evaluated the collateral pool's composition by considering the loan types and seasoning level. We assess the transaction's expected default rates by loan type based on available industry data for similar loan type performance. We adjusted our analysis to reflect the CASL 2017-A loan pool composition. Our expected default rate for the CASL 2017-A loan pool reflects a weighted average of our expected default rates for similar collateral pool segments, which we review periodically. Our pool default rate projection is a function of the expected default rate for each pool segment and its dollar amount (i.e., weight) in the transaction's pool. We determine the pool segments by: Loan payment type: fully deferred, fixed payment, interest only, or full principal and interest; School status: for-profit or not-for-profit; Cosigner presence: cosigned or non-cosigned loans; FICO score range: three FICO ranges starting at the minimum of 660 and going higher; and Graduate/parent obligors versus undergraduate obligors. For each pool segment, we summarized our expected default rates on a weighted average basis into six expected default rates (see table 3). Table 3 Expected Default Rates Loan type Expected default rate (%) Approximate CASL 2017-A pool composition (%) Fully deferred payment (cosigned) Fully deferred payment (non-cosigned) Interest-only payment (cosigned) Interest-only payment (non-cosigned) Fixed payment (cosigned) Fixed payment (non-cosigned) Full principal and interest (cosigned) Full principal and interest (non-cosigned) Graduate and parent Based on the loan data we analyzed, we expect loans with comparable loan and obligor characteristics to perform as follows: JUNE 23,

8 Not-for-profit school loans to outperform for-profit school loans; Obligors with higher FICO scores to outperform obligors with lower FICO scores; Loans that have been making principal and interest (P&I) payments to outperform loans just entering P&I repayment status; Cosigned loans to outperform non-cosigned loans; and Graduate/parent loans to outperform undergraduate loans. In establishing our base case default range, we considered information provided by the sponsor including the percentage of the loans in the pool above their respective state usury limits they may be exposed to true lender risk. The percentage of the loans above their respective state usury limits in the pool is de minimus, and in our view, accounted for in our base case default analysis. Based on this information, we expect the transaction's cumulative default rate to be in the 14.0%-15.0% range. The loans in the pool are all recently originated loans. Accordingly, we gave no seasoning credit. Based on the information provided by the sponsor and comparisons of the loans supporting the transaction to similar loans over time, we assumed a 25% cumulative base-case recovery rate. We expect the CASL 2017-A transaction's cumulative net loss rate to be in the 10.5%-11.3% range. Cash Flow Modeling Assumptions And Results We modeled the CASL 2017-A transaction to simulate stress scenarios that we believe are commensurate with the assigned preliminary ratings (see tables 4 and 5). Table 4 Stressed Cash Flow Modeling Assumptions For 'BBB' Scenarios Preliminary rating BBB (sf) Overall cumulative default rate (%) Cumulative default timing fast scenario (approximate %) per year(i) Cumulative default timing slow scenario (approximate %) per year(i) Cumulative recovery rate (%) /20/20/20/20 15/15/15/15/10/10/10/10 Cumulative recovery rate timing (approximate %) per year 2.0/2.0/2.0/2.0/2.0/2.0/2.0/2.0/2.0/2.0 Voluntary prepayment rate (% CPR) per year Deferment % per year(ii) Forbearance % per year(iii) 2//3/4/5/6/7 for the transaction's remaining life 18/18/18(v) 9(v) (i)we ran separate fast and slow default timing scenarios. (ii)as loans enter repayment, 18% of their aggregate balance goes into deferment status for three years. (iii)as loans enter repayment, 9% of their aggregate balance goes into forbearance status for one year. (v)in addition to the 'BBB' scenarios described in this table, we ran additional scenarios with deferment and forbearance assumptions reduced by 50% from the levels specified above (all other assumptions unchanged). CPR--Constant prepayment rate. We modeled the stressed cash flow scenarios in three different interest rate environments, which we based on two one-month LIBOR interest rate paths (see "U.S. Interest Rate Assumptions Revised For May 2012 And Thereafter," published April 30, 2012) and one-month LIBOR forward curve (see chart 2). JUNE 23,

9 Chart 2 'BBB' Stressed Cash Flow Results We stressed the cumulative default rates for the pool at approximately 31%-32% in the 'BBB' cash flow scenarios, respectively. We derived the recovery rate, voluntary prepayment rate, deferment rate, and forbearance rate stresses from our review of the sponsor's and the industry's historical data, which we adjusted to reflect the CASL 2017-A's pool composition and the assigned preliminary ratings. In 'BBB' cash flow scenarios, the class A notes received interest payments due on every distribution date and principal payments by the notes' maturity dates. In addition, we ran several liquidity cash flow scenarios with zero voluntary prepayment rates to ensure that all of the notes were retired by their maturity dates. The first set of liquidity scenarios assumed a zero default rate in different interest rate environments. The second set of liquidity scenarios assumed the base-case default rate and a slow default curve in different interest rate environments. All other 'BBB' assumptions remained unchanged. In these liquidity cash flow scenarios, the class A notes received interest payments due on every distribution date and principal payments by the notes' maturity dates. JUNE 23,

10 Break-Even Cash Flow Results In addition to 'BBB' cash flow scenarios using the 'BBB' default-rate assumptions, we ran break-even cash flow scenarios that maximized the default rate while keeping all other assumptions at the 'BBB' level. In the 'BBB' break-even scenarios, the CASL 2017-A transaction was able to absorb cumulative defaults approximately in the 37%-38% range and cumulative net losses approximately in the 29%-30% range depending on the interest rate scenario. In the 'BBB' break-even scenarios, the class A notes received interest payments due on every distribution date and principal payments by the notes' maturity dates. These results support coverage multiples of approximately 2.6x-2.9x our 10.5%-11.3% base-case net loss range in the 'BBB' scenario. Additional Stress Scenarios--Basis Risk As noted above, we based our 'BBB' scenarios on three interest rate paths. Approximately 69% of the loans in the CASL 2017-A pool have interest rates indexed to one-month LIBOR, and the remaining 31% of loans have fixed interest rates. To test the transaction's sensitivity to the interest rates, we analyzed additional 'BBB' cash flow scenarios in which we assumed one month-libor to be 0.00% for the transaction's life and other assumptions corresponding to our 'BBB' stresses. In this additional 'BBB' cash flows scenario, the class A notes received interest payments due on every distribution date and principal payments by the notes' maturity dates. Sensitivity Cash Flow Analysis In addition to the 'BBB' stressed and break-even cash flows, we reviewed the class A credit enhancement coverage of the remaining net losses to assess the stability of the assigned preliminary ratings under moderate stress conditions ('BBB' stress). The class A credit enhancement coverage of the remaining net losses builds over time (see chart 3). Chart 3 represents the class A credit enhancement as multiples of the remaining net losses in moderate stress scenarios ('BBB'). JUNE 23,

11 Chart 3 At closing, under moderate stress scenarios, the class A notes would have approximately 1.2x coverage multiples of the remaining net losses, depending on a default curve and interest rate scenario. The class A coverage multiples remain relatively constant for the first six years and increase thereafter for the transaction's remaining life. Based on the cash flow scenario above, we would expect our ratings on the class A notes to remain within two rating categories of our preliminary 'BBB (sf)' ratings in the first year. This expectation is consistent with our credit stability criteria (see "Methodology: Credit Stability Criteria," published May 3, 2010). Administration And Servicing For The CASL 2017-A Loan Portfolio Administrator and Master Servicer College Avenue Student Loans LLC (CASL), the sponsor, is a Delaware limited liability company organized in July CASL is a fintech lending company with a primary focus on private loans. The sponsor, through its wholly owned subsidiaries, will be the administrator and master servicer. CASL offers lending services to families who need to cover current school costs or graduates who want to refinance existing student loan debt.. JUNE 23,

12 CASL's core products are private undergraduate, graduate, and parent loans. These products serve current students (and students' parents) at most not-for-profit and select for-profit institutions. Applicants must meet school eligibility and credit underwriting requirements, and the loans must be certified by the institution. CASL also offers student loan refinancing for both federal and private student loans. Applicants must meet credit underwriting requirements to qualify. CASL was founded in December 2014 and has continued to increase its origination volume over the last two years as it develops loan products. Backup Administrator Goal Structured Solutions Inc. (GS2), a Delaware corporation, will act as backup administrator and will perform certain ongoing securities administration functions. GS2 also serves as the backup administrator for four student loan securitization transactions completed in 2016 for a third-party and provides similar securities administration functions. GS2 has been in business since GS2 and its subsidiaries' principal businesses are: Performing professional services associated with student loans, including serving in the capacity of master servicer, sub-servicer, or administrator for securitizations and other financing arrangements, performing student loan valuation, portfolio performance analytics and other loan management services, and providing transaction advisory and management services; Investing capital into performing and nonperforming student loan portfolios; and Originating private student loans. As of March 31, 2017, GS2 acts as administrator for $16 billion of federal and private student loans asset-backed securitizations across 90 different financing structures, as well as master servicer or sub-servicer for $7 billion of private student loans across 76 different financing structures. GS2's primary management and operations team has been managing student loan asset-backed securitizations since Servicer University Accounting Services LLC (UAS) will be the initial servicer. Established in 1969, UAS was the first company to focus specifically on campus-based private loan services. Today, UAS continues to provide custom loan support programs to their client base of more than 500 colleges, universities, and private lenders across the country. Their experience encompasses all types of loan programs and delinquent receivables, including private education loans, Federal Perkins loans, Health Professions Student Loans (HPSL), Loans to Disadvantaged Students (LDS), miscellaneous receivables (delinquent and non-delinquent), National Defense/Direct Student Loans (NDSL), Nurse Faculty Loan Program (NFLP), Nursing Student Loans (NSL), Primary Care Loans (PCL), private institutional programs, state-mandated loan and forgiveness programs, and student tuition. UAS services an active portfolio of more than 750,000 active borrowers with an outstanding balance of approximately $5 billion. The portfolio is split between student loans originated by private and colleges/universities directly, which are a mix of Federal and institutional programs. Backup Servicer Pennsylvania Higher Education Assistance Agency (PHEAA) will be the initial backup servicer. PHEAA is a corporate JUNE 23,

13 and political body, constituting a public corporation and government instrument created pursuant to an act of the Pennsylvania legislature. Under its enabling legislation, PHEAA is authorized to undertake the origination and servicing of loans made by PHEAA and others. As of Dec. 31, 2016, PHEAA had approximately 3,600 employees. PHEAA services student loans through its commercial servicing, FedLoan servicing (FLS), and remote servicing lines of business. The commercial servicing line of business services private student loans and FFEL program loans for customers, which consist of national and regional banks and credit unions, secondary markets, and government entities. The FLS line of business services federally owned FFEL and William D. Ford (Direct Loan) program loans. The remote servicing line of business provides PHEAA's systems to guarantors, other servicers, and not-for-profit (NFP) servicers, who were awarded servicing contracts under the Direct Loan program for use in servicing borrowers. As of Dec. 31, 2016, PHEAA serviced approximately 9.8 million student borrowers representing an aggregate of approximately $324.8 billion outstanding principal amount under its commercial servicing and FLS lines of business. Through its commercial servicing line of business, PHEAA serviced $43.7 billion for lenders as of Dec. 31, 2016, with an approximately $13.4 billion principal balance of private student loans outstanding, which makes PHEAA one of the nation's largest servicers of private student loans. Related Criteria And Research Related Criteria General Criteria: Methodology And Assumptions For Stressed Reinvestment Rates For Fixed-Rate U.S. Debt Obligations, Dec. 22, 2016 Criteria - Structured Finance - General: Ratings Above The Sovereign - Structured Finance: Methodology And Assumptions, Aug. 8, 2016 Criteria - Structured Finance - General: Methodology: Criteria For Global Structured Finance Transactions Subject To A Change In Payment Priorities Or Sale Of Collateral Upon A Nonmonetary EOD, March 2, 2015 Criteria - Structured Finance - General: Global Framework For Cash Flow Analysis Of Structured Finance Securities, Oct. 9, 2014 Criteria - Structured Finance - ABS: Methodology And Assumptions For U.S. Private Student Loan ABS Credit Analysis, Feb. 13, 2013 Criteria - Structured Finance - General: Criteria Methodology Applied To Fees, Expenses, And Indemnifications, July 12, 2012 General Criteria: Global Investment Criteria For Temporary Investments In Transaction Accounts, May 31, 2012 Criteria - Structured Finance - RMBS: U.S. Interest Rate Assumptions Revised For May 2012 And Thereafter, April 30, 2012 Criteria - Structured Finance - General: Standard & Poor's Revises Criteria Methodology For Servicer Risk Assessment, May 28, 2009 Legal Criteria: Legal Criteria For U.S. Structured Finance Transactions: Appendix III: Revised UCC Article 9 Criteria, Oct. 1, 2006 Legal Criteria: Legal Criteria For U.S. Structured Finance Transactions: Criteria Related To Asset-Backed Securities, Oct. 1, 2006 Legal Criteria: Legal Criteria For U.S. Structured Finance Transactions: Select Issues Criteria, Oct. 1, JUNE 23,

14 Legal Criteria: Legal Criteria For U.S. Structured Finance Transactions: Special-Purpose Entities, Oct. 1, 2006 Legal Criteria: Legal Criteria For U.S. Structured Finance Transactions: Securitizations By Code Transferors, Oct. 1, 2006 Criteria - Structured Finance - ABS: Student Loan Criteria: Rating Methodology For Student Loan Transactions, Oct. 1, 2004 Criteria - Structured Finance - ABS: Student Loan Criteria: Structural Elements In Student Loan Transactions, Oct. 1, 2004 Criteria - Structured Finance - ABS: Student Loan Criteria: Evaluating Risk In Student Loan Transactions, Oct. 1, 2004 Related Research U.S. Biweekly Economic Roundup: Short Of Expectations, June 2, 2017 Global Structured Finance Outlook 2017, Jan. 4, 2017 Global Structured Finance Scenario And Sensitivity Analysis 2016: The Effects Of The Top Five Macroeconomic Factors, Dec. 16, 2016 The Rating Process For Student Loan Transactions, Oct. 1, 2004 Student Loan Programs, Oct. 1, 2004 In addition to the criteria specific to this type of security (listed above), the following criteria articles, which are generally applicable to all ratings, may have affected this rating action: "Post-Default Ratings Methodology: When Does Standard & Poor's Raise A Rating From 'D' Or 'SD'?," March 23, 2015; "Global Framework For Assessing Operational Risk In Structured Finance Transactions," Oct. 9, 2014; "Methodology: Timeliness of Payments: Grace Periods, Guarantees, And Use of 'D' And 'SD' Ratings," Oct. 24, 2013; "Counterparty Risk Framework Methodology And Assumptions," June 25, 2013; "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings," Oct. 1, 2012; "Methodology: Credit Stability Criteria," May 3, 2010; and "Use of CreditWatch And Outlooks," Sept. 14, Analytical Team Primary Credit Analyst: Ronald G Burt, New York (1) ; ronald.burt@spglobal.com JUNE 23,

15 Copyright 2017 by Standard & Poor s Financial Services LLC. All rights reserved. No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an as is basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, (free of charge), and and (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at STANDARD & POOR S, S&P and RATINGSDIRECT are registered trademarks of Standard & Poor s Financial Services LLC. JUNE 23,