KBRA Removes Watch Downgrade on Class D Notes of Thoma Bravo Credit Asset Funding ABS, LLC; Affirms All Ratings
6 Aug 2026 | New York
KBRA removes Watch Downgrade on Class D Notes of Thoma Bravo Credit Asset Funding ABS, LLC (“TBCAF 2023- 1R”) and affirms the ratings on all rated notes.
TBCAF 2023-1R is a static securitization backed by recurring revenue loans ("RRLs") and middle market loans ("MMLs"). As of the July 2026 trustee report, the portfolio consisted of 21 obligors with an aggregate collateral balance of $268.8 million. Continued collateral amortization and higher-than-expected prepayments have increased portfolio concentration. Because excess concentrations are excluded from the Borrowing Base calculation, the increased concentration caused the Borrowing Base Condition to fail on consecutive payment dates, triggering a permanent Rapid Amortization Event following the July 2026 Payment Date.
As a result, interest and principal proceeds are applied to transaction fees and expenses, interest due on notes senior to the Class D Notes, and then to sequentially repay the most senior outstanding notes. The Class D Notes will continue to defer current interest and receive no principal distributions until all senior note classes have been repaid. As of the July 2026 payment date, cumulative Deferred Interest on the Class D Notes totaled $1.1 million. Deferred Interest does not form part of the outstanding principal balance and accrues at the stated Class D note coupon rate until paid pursuant to the Priority of Payments. In addition, the transaction is exposed to a defaulted asset representing approximately 5.3% of the Aggregate Initial Principal Balance (8.3% of the current portfolio), which is excluded from the Borrowing Base calculation.
KBRA's surveillance analysis incorporates the current portfolio, increased concentration, the defaulted asset, the Rapid Amortization waterfall, and the resulting Class D interest deferral. Although the Class D Notes continue to experience payment deferral, this outcome is consistent with the transaction's structural protections and the cash flow assumptions incorporated into both KBRA's initial and updated analyses. Based on the updated cash flow analysis, KBRA believes the available credit enhancement remains sufficient to support the current ratings and has therefore resolved the Watch Downgrade by affirming all ratings. KBRA will continue to monitor collateral performance, the level of Deferred Interest on the Class D Notes, and risks associated with the portfolio's increased concentration.
The table below displays the current capital structure and the rating actions.
To access ratings and relevant documents, click here.
Click here to view the report.