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Kroll Assigns Preliminary Ratings to Oxford Finance Funding 2016-1 LLC

May 31, 2016, 07:36 AM
Filed Under: Corporate Ratings

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to the Class A Notes and the Class B Notes (together, the “Notes”) issued by Oxford Finance Funding 2016-1 LLC.

Oxford Finance LLC is the originator and servicer of the Oxford Finance Funding 2016-1 transaction (Oxford 2016-1). Oxford is a specialty finance company that originates, underwrites, manages, and finances senior secured loans provided exclusively to life sciences and healthcare services companies. Oxford lends to biotech, pharmaceutical, medical devices and healthcare services companies and offers loan products that include senior secured term loans, cash flow loans, traditional asset-based revolving lines of credit, term loans secured primarily by real estate and, occasionally, equipment loans.

The Notes will be secured by an initial collateral pool comprised primarily of senior secured loans and the loans are secured by substantially all assets of the obligor. In the case of life science companies, the loans often include a negative pledge on intellectual property. The statistical collateral pool will consist of 75 loans to 63 obligors with an aggregate loan balance of approximately $390.4 million. The exposures to the life sciences and healthcare service sectors will be approximately 85.5% and 14.5%, respectively.

Oxford 2016-1 benefits from credit enhancement in the form of overcollateralization, which on the closing date is approximately 27% for the Class A Notes and 17% for the Class B Notes, as well as excess spread. The transaction features a 24-month reinvestment period during which time principal collections may be reinvested in additional loans that meet certain eligibility criteria. The transaction also features a reserve account that will be partially funded on the closing date and will grow to 3.0% of the outstanding Note balance from excess interest collections, after paying expenses, interest and principal on the Notes.

View the preliminary ratings here.

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