NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three categories of notes issued by KKR CLO 39 Ltd. .
KKR CLO 39 is managed by KKR Financial Advisors II, LLC (“KKR” or the “Guarantee Manager). The agreement will have a five-year reinvestment period. The legal final maturity is October 15, 2034. Ratings reflect initial levels of credit enhancement, credit spreads and hedging tests, including overcollateralisation ratio and interest coverage tests.
The KKR CLO 39 guarantee will primarily consist of largely syndicated leveraged loans issued by debtor companies diversified across all sectors. The total nominal amount of the portfolio is $ 525.0 million with exposure to 280 accounts receivable. Debtors in the portfolio have a K-WARF of 2425, which represents a weighted average portfolio credit rating of approximately B. KBRA has also taken into account the potential for negative credit deterioration of the portfolio in the short to medium term and the sensitivity of transactions to macroeconomic shocks such as that observed. during the COVID-19 pandemic.
As of June 30, 2021, KKR manages $ 170.1 billion under its leveraged lending, private lending and strategic investment strategies. The company has 40 investment professionals in its leveraged credit platform and has issued approximately $ 36 billion in new CLO issues since 2003, making it one of the largest CLO managers in terms of primary passive.
The preliminary rating for Class A notes takes into account the on-time payment of interest and the final payment of principal on the applicable stated maturity date, while the preliminary ratings for Class D and E notes take into account the final payment of interest and of capital.
Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned above.
A description of all substantially significant sources that were used to prepare the credit rating and information about the method (s) (including significant models and sensitivity analyzes of the relevant key rating assumptions, if any) used to determine the credit rating are available in the information disclosure form (s) located here.
Information on the meaning of each rating category can be located here.
Further information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures can be found at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or a shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.