KBRA Assigns Preliminary Ratings to ABPCI Direct Lending Fund ABS III LLC
28 May 2025 | New York
KBRA assigns preliminary ratings to seven classes of debt issued by ABPCI Direct Lending Fund ABS III LLC, ("ABPCI III(R)") a securitization backed a portfolio of recurring revenue loans, middle market loans, and hybrid asset-backed loans.
ABPCI III(R) is a loan securitization managed by AB Private Credit Investors LLC (“ABPCI” or the “Collateral Manager”). The securitization consists of $100.0 million Class A-L Loans, $94.3 million Class A-2 Notes, $21.0 million Class B Notes, $17.5 million Class C Notes, $8.8 million Class D-1 Notes, $21.0 million Class D-2 Notes, $17.5 million Class E Notes, and $70.0 million Subordinated Notes, which are expected to receive payments from the portfolio, consisting primarily of recurring revenue loans (“RRLs”) and middle market loans (“MMLs”). Proceeds from the issuance of the notes will be used to purchase assets to a total of approximately $350.0 million.
The transaction benefits from internal credit enhancement through subordination, borrowing base, and excess spread. KBRA determined a credit assessment for each asset in the initial portfolio. On the refinancing date, the portfolio is expected to have a K-WARF of 3619, which equates to a weighted average assessment between B- and CCC+. The overall credit quality of RRLs, which account for 66.0% of the portfolio, is generally lower than that of traditional MMLs.
Kroll Bond Rating Agency’s (KBRA) ratings on the Class A-L Loans, A-2 Notes (collectively the Class A Debt), Class B Notes, Class C Notes, Class D-1 Notes, and Class D-2 Notes (collectively the Class D Notes) consider the timely payment of interest and ultimate payment of principal by the applicable stated maturity date. KBRA’s rating on the Class E Notes considers the ultimate payment of interest and principal by the applicable stated maturity date.
To access ratings and relevant documents, click here.
Click here to view the report.