KBRA assigns preliminary ratings to ABS financing of Golub Capital Partners 2021-2

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NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to two categories of notes issued by Golub Capital Partners ABS Funding 2021-2 (GCPAF 2021-2), a securitization backed by a portfolio of recurring income and corporate loans of the middle market.

GCPAF 2021-2 is a $ 450.0 million securitization managed by GC Investment Management LLC (“GCIM” or the “Collateral Manager”), an investment advisor and an affiliate of GC Advisors LLC (collectively, these companies affiliates and other funds managed by them and their “Golub Capital” subsidiaries). The securitization consists of $ 283.5 million in Class A notes, $ 45.0 million in Class B notes and $ 124.5 million in subordinated notes, which are expected to receive payments from ” a portfolio of recurring income loans (“RRL”) and middle market loans (“MML”). The reinvestment period is approximately two years from the closing date. Ratings reflect initial levels of credit enhancement, excess spreads and structural characteristics.

Golub Capital’s recurring income lending strategy focuses on senior secured loans to business-to-business software and healthcare companies with a minimum level of recurring income and low loan-to-value ratios. Despite the low level of earnings, portfolio debtors generally have strong liquidity profiles and credit covenants. The overall K-WARF of the portfolio is 3514, which represents a weighted average valuation of the portfolio between B- and CCC +. The portfolio presented to KBRA contains exposures to 57 debtors with 65.6% of the nominal exposure to RRLs.

GC Investment Management LLC is an investment advisor established in 2010. GCIM is a USVI company which provides investment management, fund accounting, operations and administration services to manage some of Golub Capital’s offshore funds. Through service agreements, the collateral manager will leverage the Golub Capital platform, including its investment professionals and other resources. Founded in 1994, Golub Capital has over $ 40 billion in capital under management as of July 30, 2021, with over $ 30 billion in direct middle market loans and over $ 5 billion in effect loans. largely unionized leverage.

KBRA’s preliminary rating on the Class A and Class B Notes takes into account the on-time payment of interest and the final payment of principal on the applicable stated maturity date.

KBRA analyzed the transaction using the Global structured credit rating methodology, the Global structured finance counterpart methodology, and the Overall ESG rating methodology.

Click on here to view the report. To access the assessments and relevant documents, click on here.

Disclosures

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 is 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.

About KBRA

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.


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