KBRA Assigns Preliminary Ratings to Kapitus Asset Securitization IV LLC, Series 2024-1

KBRA assigns preliminary ratings to four classes of notes (the “Notes”) issued by Kapitus Asset Securitization IV LLC, Series 2024-1.

Kapitus, formerly known as Strategic Funding Source, Inc. (“Kapitus” or the “Company”), was founded in 2006 and provides financing to small and medium-sized businesses through the use of proprietary risk scoring models, transactional data and technology systems. Since 2014, Kapitus has received financial support from Pine Brook Partners, a New York-based private equity firm with experience investing in financial services companies.

This transaction represents the first series of notes issued by Kapitus Asset Securitization IV LLC (the “Issuer”), but the seventh series of notes sponsored by the Company. The Issuer will issue four classes of Series 2024-1 Notes totaling $160 million initially. The transaction features a three-year revolving period unless a Rapid Amortization Event has occurred (the “Revolving Period”). During the Revolving Period, the Issuer will purchase additional receivables that meet the eligibility criteria and concentration limits.

The Series 2024-1 Notes are “expandable” term notes such that at any time during the Revolving Period, the Issuer may upsize the current Notes, up to a maximum amount of $500 million, as long as certain conditions are met, including receipt of Rating Agency Confirmation. The consent of existing noteholders will not be required for these upsizes. As such, upsizes may dilute the control and voting rights of existing noteholders.

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