Fitch Upgrades CoLTS 2005-2, Ltd./Corp.
NEW YORK -- April 24, 2013
Fitch Ratings has upgraded the class D notes issued by CoLTS 2005-2,
Ltd./Corp. (CoLTS 2005-2). The Rating Outlook is Stable. A complete list of
rating actions is provided at the end of this release.
KEY RATING DRIVERS
The upgrade is the result of the increased credit enhancement of the class D
notes after the March 20, 2013 payment date. The class C notes were paid in
full and approximately 82.1% of the class D note balance was paid down. As of
the March 2013 trustee report, $28.2 million comprising eight obligors remain
in the performing portfolio. On a deterministic basis, there is enough credit
enhancement to protect the class D notes from the default (and total loss) of
the five largest obligors in the portfolio. In addition, a rating cap of 'Asf'
was applied given the highly concentrated portfolio.
Due to the few obligors left in the performing portfolio, Fitch considers the
principal risk of the notes to be tied to the expected recoveries of the
remaining performing obligors. As previously mentioned, the notes are
protected against the total losses of the five largest obligors in the
portfolio. Losses that exceed the total loss of the five largest obligors
would result in a downgrade.
CoLTS 2005-2 is a cash flow collateralized loan obligation that closed Jan.
10, 2006 and is managed by Ivy Hill Asset Management, L.P. (Ivy Hill), an
affiliate of Ares Capital Corporation. Ivy Hill became manager through a
sub-servicing agreement executed with Structured Asset Investors, LLC, a
wholly owned subsidiary of Wachovia Bank, N.A. on June 15, 2009. The remaining
$28.2 million performing portfolio is composed first lien loans, across eight
obligors. There are no long-dated assets in the portfolio; the remaining
assets are expected to mature prior to the legal final maturity date of CoLTS
2005-2, which is the final payment date in December 2018.
Fitch has upgraded the following rating:
--$3,572,473 class D notes upgraded to 'Asf' from 'BBsf', Outlook Stable.
Additional information is available at 'www.fitchratings.com'.
The information used to assess these ratings was sourced from the asset
manager, periodic servicer reports, note valuation reports, and the public
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (June 6, 2012);
--'Global Rating Criteria for Corporate CDOs' (Aug. 8, 2012);
--'Criteria for Rating Caps in Global Structured Finance Transactions' (Aug.
Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Global Rating Criteria for Corporate CDOs
Criteria for Rating Caps in Global Structured Finance Transactions
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Primary Surveillance Analyst
Christine Choo, +1 212-908-0603
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Derek Miller, +1 312-368-2076
Sandro Scenga, +1 212-908-0278
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