NEW YORK–(BUSINESS WIRE)–KBRA assigns preliminary ratings to three classes of bonds issued by Monroe Capital Income Plus ABS Funding, LLC (MCIP 2022-1), a securitization backed by a portfolio of primarily recurring income and middle market corporate loans.
MCIP 2022-1 is a $425.0 million securitization managed by Monroe Capital BDC Advisors, LLC (“Monroe” or the “Collateral Manager”), a subsidiary of Monroe Capital LLC. The securitization consists of $261.375 million of Class A fixed rate notes, $44.625 million of Class B fixed rate notes, $36.125 million of Class C fixed rate notes and $82.875 million of subordinate note dollars, which expect to receive payments from a portfolio of recurring income. loans (“RRL”) and middle market loans (“MML”).
Collateral in MCIP 2022-1 can contain up to 75% RRL. The RRL strategy focuses on senior senior loans to software and technology companies with a minimum level of recurring revenue and low loan-to-value (LTV) ratios. Despite the low level of income, debtors in the portfolio generally have strong liquidity profiles and covenants. The portfolio presented to the KBRA contains exposures to 64 obligors and has an overall K-WARF of 3567, which equates to a weighted average portfolio rating between B- and CCC+.
Monroe is a subsidiary of Monroe Capital LLC established in 2004, with $12.7 billion in committed and managed capital under management as of December 2021. Monroe currently manages $4.0 billion in middle market and largely syndicated loan CLOs in 13 pending transactions. Since its inception, Monroe has invested nearly $5 billion in its Software, Technology and Recurring Revenue (“STARR”) strategy. The management team has extensive industry experience.
KBRA’s preliminary ratings on the Class A and B Notes reflect the timely payment of interest and final payment of principal on the applicable stated maturity date. KBRA’s preliminary rating on the Class C Notes takes into account final payment of interest and principal on the applicable stated maturity date.
KBRA analyzed the transaction using the Global Structured Credit Rating Methodology, the Global Structured Finance Counterparty Methodology and the ESG Global Rating Methodology.
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Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could 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 on the methodology(ies) (including all significant models and sensitivity analyzes of the main relevant rating assumptions, the where applicable) used to determine credit rating are available in the information disclosure form(s) located here.
Information on the meaning of each rating category can be found here.
Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available 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 an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a rating agency with the UK Financial Conduct Authority under the temporary registration scheme. In addition, KBRA is designated as the Designated Rating Agency by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.