KBRA Assigns Ratings to VCP RRL ABS IV, LLC
19 Feb 2025 | New York
KBRA assigns ratings to four classes of debt issued by VCP RRL ABS IV, LLC (VCP IV), a securitization backed by a portfolio of recurring revenue and middle market corporate loans.
VCP IV is an approximate $525.0 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 $95.0 million Class A-L Loans, $100.0 million Class A-2 Notes (which are not a part of this rating action), $151.5 million Class A-3 Notes, $63.0 million Class B Notes, $36.8 million Class C Notes, and $78.8 million of Subordinated Notes (collectively the “Debt”, excluding Class A-2). The Debt is expected to receive payments from a portfolio of recurring revenue loans (“RRLs”) and middle market loans(“MMLs”). The transaction is generally 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 VCP’s fourth 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 Class A, B, and C Notes have advance rates of 66.0%, 78.0%, and 85.0%, respectively. The overall KWARF of the portfolio is 3640, which represents a weighted average portfolio assessment between B- and CCC+.
KBRA’s ratings on the Class A-L Loans, Class A-3 Notes, and Class B Notes consider timely payment of interest and ultimate payment of principal by the applicable stated maturity date, and KBRA’s rating on the Class C Notes considers the ultimate payment of interest and principal by the applicable stated maturity date.
To access ratings and relevant documents, click here.
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