Fitch: Proposed Replacement Collateral Manager for Crystal Cove Not Expected to Impact Ratings

NEW YORK--(BUSINESS WIRE)--

The proposed manager replacement for Crystal Cove CDO, Ltd. (Crystal Cove) is unlikely to impact the transaction's outstanding ratings, according to Fitch Ratings.

Fitch has been notified of a proposed amendment and restatement to the Crystal Cove Collateral Management Agreement (CMA) in which the CDO asset management responsibilities for the transaction would be assumed by Vertical Capital, LLC (Vertical Capital), successor collateral manager to Pacific Investment Management Company LLC.

The most senior class in the transaction is currently rated 'Csf', indicating that default appears inevitable for the notes. In addition, Crystal Cove is no longer in its reinvestment period and all overcollateralization tests have been failing. Given the above, the manager's capabilities are no longer a rating factor for this transaction. Accordingly, Fitch has not evaluated the replacement manager and does not expect the amendment and restatement of the CMA and the appointment of Vertical Capital as collateral manager thereunder to result in the withdrawal, reduction or other adverse action with respect to the current rating of the notes.

Fitch is not a party to the transaction and therefore does not provide consent or approval, as that remains the sole preserve of the transaction parties. Fitch expects to be notified by the trustee when or if the proposed transfer of asset management responsibilities is completed.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (June 6, 2012);

--'Global Rating Criteria for Structured Finance CDOs' (Oct. 3, 2012);

--'Counterparty Criteria for Structured Finance Transactions' (May 30, 2012).

Applicable Criteria and Related Research:

Global Rating Criteria for Structured Finance CDOs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=690203

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679923

Counterparty Criteria for Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678938

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