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Fitch Rates OHA Credit Partners X, Ltd./Inc.

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned the following ratings to OHA Credit Partners X Ltd./Inc.:

--$4,000,000 class X notes 'AAAsf'; Outlook Stable;

--$463,500,000 class A notes 'AAAsf'; Outlook Stable.

Fitch does not rate the class B, C, D, E, F, or subordinated notes.

TRANSACTION SUMMARY

OHA Credit Partners X, Ltd. (the issuer) and OHA Credit Partners X, Inc. (the co-issuer) together comprise an arbitrage cash flow collateralized loan obligation (CLO) that will be managed by Oak Hill Advisors, L.P. Net proceeds from the issuance of the secured and subordinated notes will be used to purchase a portfolio of approximately $750 million of primarily senior secured leveraged loans. The CLO will have a four-year reinvestment period and a two-year noncall period.

KEY RATING DRIVERS

Sufficient Credit Enhancement: Credit enhancement (CE) of 38.2% for the class A notes, in addition to excess spread, is sufficient to protect against portfolio default and recovery rate projections in a 'AAAsf' stress scenario. The degree of CE available to the class A notes is slightly higher than the average CE of recent CLO issuances. Class X notes are expected to be paid in full with interest proceeds by the second payment date.

'B/B-' Asset Quality: The average credit quality of the indicative portfolio is 'B/B-', which is comparable to recent CLOs. Issuers rated in the 'B' rating category denote a highly speculative credit quality; however, in Fitch's opinion, the class X and A notes are unlikely to be affected by the foreseeable level of defaults. The class X and A notes are projected to be able to withstand default rates of up to 100% and 63.1%, respectively.

Strong Recovery Expectations: The indicative portfolio consists of 95.6% first-lien senior-secured loans. Approximately 92.1% of the indicative portfolio has either strong recovery prospects or a Fitch-assigned recovery rating of 'RR2' or higher.

Consistent Portfolio Parameters: The concentration limitations and collateral quality test levels are generally within the range of limits set in the majority of recent CLOs. Fitch addressed the impact of the most prominent risk-presenting concentration allowances in the Fitch stressed portfolio analysis.

RATING SENSITIVITIES

Fitch evaluated the structure's sensitivity to the potential variability of key model assumptions including decreases in weighted average spread or recovery rates and increases in default rates or correlation. Fitch expects the class X and class A notes to remain investment grade even under the most extreme sensitivity scenarios. Results under these sensitivity scenarios ranged between 'Asf' and 'AAAsf' for the class A notes. The class X notes passed all sensitivity scenarios at a 'AAAsf' rating threshold.

Key Rating Drivers and Rating Sensitivities are further described in the accompanying new issue report, which will be available shortly to investors on Fitch's website at 'www.fitchratings.com'.

For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at 'webmaster@fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

The sources of information used to assess these ratings were the transaction documents provided by the arranger, Morgan Stanley & Co. LLC, and the public domain.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Global Rating Criteria for Corporate CDOs' (Aug. 8, 2013);

--'Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds' (Jan. 23, 2014);

--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 14, 2014);

--'OHA Credit Partners X, Ltd./Inc. -- Appendix' (June 4, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Global Rating Criteria for Corporate CDOs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715492

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=725537

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

OHA Credit Partners X, Ltd./Inc. -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749791

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=837217

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Robert Rhein, +1-312-606-2314
Director
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Joseph Farfsing, +1-312-368-3346
Associate Director
or
Committee Chairperson
Derek Miller, +1-312-368-2076
Senior Director
or
Fitch Ratings
Sandro Scenga, +1-212-908-0278
Media Relations, New York
sandro.scenga@fitchratings.com