Kroll Bond Rating Agency Assigns Preliminary Ratings to Drug Royalty III LP 1 – Series 2017-1 Senior Secured Notes

NEW YORK--()--Kroll Bond Rating Agency (KBRA) announces the preliminary ratings to two note classes of Drug Royalty III LP 1, a drug royalty securitization.

This transaction is backed by royalty revenues from 12 royalty streams on 11 pharmaceutical products and/or technologies. The Series 2017-1 notes will be the Issuer’s second series within the master trust, and will be serviced by DRI Capital Inc. (“DRI”, or the “Company”). The first series under the master trust was the 2016-1 notes that will have an expected outstanding balance of approximately $116.0 million at the closing date of this transaction. The 2016-1 notes are pari passu to the 2017-1 notes. KBRA’s rating will be assigned only on the 2017-1 notes. The proceeds from the notes will be used to acquire certain drug royalty assets from the Originator and for other general corporate purposes.

The total discounted asset value (“DAV”) for the royalty related payments of the portfolio is approximately $449.9 and the initial overcollateralization is approximately 41%, calculated as the amount by which the aggregate DAV of the assets exceeds the principal balance of the notes.

KBRA analyzed the transaction using the General Rating Methodology for Asset-Backed Securities published on July 30, 2012. KBRA will review the final operative agreements and legal opinions for the transaction prior to closing.

For complete details on the analysis, please see KBRA’s Pre-Sale Report, Drug Royalty III LP 1 – Series 2017-1 Senior Secured Notes, which was published today at www.kbra.com.

The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.

Preliminary Ratings Assigned: Drug Royalty III LP 1 – Series 2017-1 Senior Secured Notes

                 
  Series 2017-1     Rating     Initial Principal Balance  
  Class A-1     BBB (sf)     $75,000,000  
  Class A-2     BBB (sf)     $75,000,000  
 

Representations & Warranties Disclosure

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found in the report entitled Disclosure is available at the following link: DRI Royalty III LP 1 Representations and Warranties Disclosure.

Related Publications: (available at www.kbra.com)

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical:
KBRA
Xilun Chen, 646-731-2431
Senior Director
xchen@kbra.com
or
Anthony Nocera, 646-731-2350
Senior Managing Director
anocera@kbra.com
or
Lenny Giltman, 646-731-2378
Managing Director
lgiltman@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Contacts

Analytical:
KBRA
Xilun Chen, 646-731-2431
Senior Director
xchen@kbra.com
or
Anthony Nocera, 646-731-2350
Senior Managing Director
anocera@kbra.com
or
Lenny Giltman, 646-731-2378
Managing Director
lgiltman@kbra.com
or
Follow us on Twitter!
@KrollBondRating