KBRA Assigns a Preliminary Rating to Converge Holdings' Senior Unsecured Note Offering
20 Apr 2026 | New York
KBRA assigns a BBB- preliminary long term credit rating (LTCR) for $50 million of five-year, 8.05% fixed rate senior unsecured notes to be issued by Converge Holdings LLC. The Outlook for the preliminary rating is Stable.
The proceeds from the issuance will be used to support the continued growth of its subsidiary, Converge RE II. At closing, six months of interest payments will be held in cash at the holding company. The key subsidiaries, including Converge RE II, will be guarantors of the notes. The notes allow for optional redemption. Covenants include maintenance of financial leverage at or below 40% at the end of each quarter; no dividend payments to the ultimate shareholder until the notes are repaid; maintenance of an NRSRO rating on the notes; not incurring or permitting to exist any mortgage, pledge, encumbrance, lien or charge on any property if the interest coverage ratio as of the end of each quarter is less than 1.50x, on a trailing twelve-month basis.
KBRA believes that pro-forma financial leverage is manageable and supported by adequate debt service coverage, partially offset by the potential for increased promissory note leverage if such borrowings are used as a liquidity backstop for debt service or note repayment.
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