___moody’s assigns rating to one class of notes issued by community funding clo, ltd.__

New York, October 16, 2015 — Moody’s Investors Service, (“Moody’s”) has assigned a rating to one class of notes issued by Community Funding CLO, Ltd. (the “Issuer” or “Community Funding CLO”). Moody’s rating action is as follows: U. S.$205,000,000 Class A Senior Secured Fixed Rate Notes Due 2027 (the “Class A Notes”), Definitive Rating Assigned A3 (sf) RATINGS RATIONALE Moody’s rating of the Class A Notes addresses


the expected loss posed to noteholders. The rating reflects the risks arising from defaults of the underlying portfolio of assets, the transaction’s legal structure, and the characteristics of the underlying assets. Community Funding CLO is a static cash flow CDO. The issued notes will be collateralized by a portfolio of subordinated debt, which are mostly in the form of subordinated loans, issued by US community banks or their holding companies.

The Issuer has identified 100% of the portfolio and has included 98% of the portfolio as of the closing date. StoneCastle Investment Management, LLC (the “Servicer”) has directed the selection and acquisition and will direct the disposition of the assets on behalf of the Issuer. The Servicer will also direct the disposition of any defaulted securities. The transaction prohibits any asset purchases or substitutions at any time, except for one asset that is pending regulatory approval. In addition to the Class A Notes, the Issuer will issue preferred shares. The transaction incorporates interest and par coverage tests which, if triggered, divert interest proceeds to pay down the notes.

This CDO’s portfolio consists entirely of subordinated debt issued by US community banks or their holding companies that Moody’s does not rate. Moody’s assesses the default probability of bank obligors that do not have public ratings through credit scores derived using RiskCalc™, an econometric model developed by Moody’s Analytics. Moody’s evaluation of the credit risk of the bank obligors in the pool relies on FDIC Q2-2015 financial data with further adjustments to the banks’ capital structure to account for the issuance of the subordinated debt. Moody’s assumed a fixed recovery rate of 10% for these subordinated debt obligations.

Moody’s rating of the Class A Notes took into account a stress scenario in which we made adjustments to the RiskCalc™ credit scores for highly levered bank holding company issuers. This stress scenario was an important factor in the assigned rating. In addition, Moody’s rating considered the highly concentrated nature of the portfolio, both by state and by individual asset size. Approximately 10% of the portfolio assets are located in the state with the highest exposure and about 20% of the portfolio assets are located in three states with high exposure to the oil and gas industry. Moreover, the portfolio only has 38 assets from 35 obligors, with the five largest assets each constituting 5.0% of the portfolio par. Credit deterioration of banks in particular states or the largest banks could have an outsized negative impact on the credit quality of the portfolio.

For modeling purposes, Moody’s used the following base-case assumptions: Par amount: $250,000,000 Weighted Average Rating Factor (WARF): 753 Weighted Average Coupon (WAC): 6.98% Weighted Average Recovery Rate (WARR): 10.0% Weighted Average Life (WAL): 9.9 years In addition to the quantitative factors that Moody’s explicitly models, qualitative factors were part of rating committee considerations. Moody’s considers the structural protections in the transaction, the risk of an event of default, the legal environment and specific documentation features. All information available to rating committees, including macroeconomic forecasts, inputs from other Moody’s analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, influenced the final rating decision. Methodology Underlying the Rating Action The principal methodology used in this rating was “Moody’s Approach to Rating TruPS CDOs,” published in June 2014. Please see the Credit Policy page on www. moodys. com for a copy of this methodology.

Factors That Would Lead to an Upgrade or Downgrade of the Rating: This transaction is subject to a number of factors and circumstances that could lead to an upgrade or downgrade of the rating, as described below: 1) Macroeconomic uncertainty: The transaction’s performance could be negatively affected by uncertainty about credit conditions in the general economy, certain regional economies, and in the US banking sector. Moody’s has a stable outlook on the US banking sector. 2) Portfolio credit risk: Credit performance of the assets collateralizing the transaction that is better than Moody’s current expectations could have a positive impact on the transaction’s performance. Conversely, asset credit performance weaker than Moody’s current expectations could have adverse consequences on the transaction’s performance.

___moody's assigns rating to one class of notes issued by community funding clo, ltd.__

3) Exposure to non-publicly rated assets: The portfolio consists entirely of unrated assets whose default probability Moody’s assesses through credit scores derived using RiskCalc. Because these are not public ratings, they are subject to additional uncertainties. Loss and Cash Flow Analysis: Moody’s obtained a loss distribution for this CDO’s portfolio by simulating defaults using Moody’s CDOROM™, which used Moody’s assumptions for asset correlations and fixed recoveries in a Monte Carlo simulation framework. Moody’s then used the resulting loss distribution, together with structural features of the CDO, as an input in its CDOEdge™ cash flow model. Moody’s CDOROM is available on www. moodys.

com under Products and Solutions — Analytical models, upon receipt of a signed free license agreement. In addition to the base case analysis, Moody’s conducted sensitivity analyses to test the impact of different default probabilities on the Rated Notes relative to the base case modeling results, which may be different from the rating assigned to the Rated Notes. Below is a summary of the impact of different default probabilities (expressed in terms of WARF level) on the Rated Notes (shown in terms of the number of notch difference versus the base case modeling results, whereby a negative difference corresponds to higher expected losses), assuming that all other factors are held equal: Assuming a two-notch upgrade to assets with below-investment grade rating estimates (WARF of 469) Class A Notes: +2 Assuming a two-notch downgrade to assets with below-investment grade rating estimates (WARF of 1175) Class A Notes: -2 Further details regarding Moody’s analysis of this transaction may be found in the related new issue report, available soon on Moodys.

com. REGULATORY DISCLOSURES For further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions of the disclosure form. Further information on the representations and warranties and enforcement mechanisms available to investors are available on http://www. moodys. com/viewresearchdoc. aspx? docid=PBS_SF418482 Moody’s describes its loss and cash flow analysis in the section “Ratings Rationale” of this press release. Moody’s quantitative analysis entails an evaluation of scenarios that stress factors contributing to sensitivity of ratings and take into account the likelihood of severe collateral losses or impaired cash flows. Moody’s weights the impact on the rated instruments based on its assumptions of the likelihood of the events in such scenarios occurring.

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider’s credit rating.

For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www. moodys. com. For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity.

Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity. Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review. Please see www. moodys. com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating. Please see the ratings tab on the issuer/entity page on www. moodys.

com for additional regulatory disclosures for each credit rating. Sange Lama Asst Vice President – Analyst Structured Finance Group Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U. S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Algis Remeza Senior Vice President/Manager Structured Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U. S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Moody’s assigns rating to one class of notes issued by Community Funding CLO, Ltd. © 2015 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY’S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY’S (“MOODY’S PUBLICATIONS”) MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES.

MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS FOR RETAIL INVESTORS TO CONSIDER MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS IN MAKING ANY INVESTMENT DECISION.

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com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.” For Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail clients. It would be dangerous for “retail clients” to make any investment decision based on MOODY’S credit rating. If in doubt you should contact your financial or other professional adviser.

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Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U. S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

___moody's assigns rating to one class of notes issued by community funding clo, ltd.__

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