KBRA Assigns Preliminary Ratings to VCP RRL ABS II, LLC (Reset)
20 Mar 2025 | New York
KBRA assigns preliminary ratings to four classes of debt issued by the reset of VCP RRL ABS II, LLC (VCP-II-R), a securitization backed by a portfolio of recurring revenue and middle market corporate loans.
VCP-II-R is an approximate $550.0 million securitization managed by Vista Credit Partners, L.P. (“VCP” or the “Collateral Manager”), an investment adviser and affiliate of Vista Equity Partners (collectively, with these affiliates and other funds managed by them and their affiliates “Vista”).
The securitization consists of $43.5 million Class A-L-R Loans, $325.0 million Class A-2-R Notes, $60.5 million Class B-R Notes, $38.5 million Class C-R Notes (collectively the “Debt”) and $82.5 million Subordinated Notes. The Debt is expected to receive payments from a portfolio of recurring revenue loans (“RRLs”) and middle market loans (“MMLs”). The transaction is static and does not feature a reinvestment period, though there is limited flexibility to make collateral substitutions. The ratings reflect initial credit enhancement levels, excess spread, and structural features.
This is a reset of VCP’s second securitization collateralized predominately by RRL and MML. The RRL strategy focuses on first lien senior loans to technology and software companies that have a minimum level of recurring revenue and low loan-to-value (LTV) ratios.
The Classes A-R, B-R and C-R Debt have a 67.0%, 78.0%, and 85.0% advance rate respectively. KBRA determined a credit assessment for each asset in the initial portfolio. At closing, the portfolio is expected to have a K-WARF of 3652, which equates to a weighted average assessment between B- and CCC+.
KBRA’s ratings on the Class A-L-R Loans and Class A-2-R Notes (collectively “Class A-R”), and the Class B-R Notes consider the timely payment of interest and ultimate payment of principal by the applicable stated maturity date. The ratings on the Class C-R Notes consider the ultimate payment of interest and ultimate payment of principal by the applicable stated maturity date.
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