KBRA Affirms Ratings for Sagard Senior Lending Partners RN-U LP
1 Dec 2025 | New York
KBRA affirms the BBB rating to the Class Notes ("Class A Notes"), BBB- rating to the Class B Notes ("Class B Notes"), and the BB- to the Class C Notes ("Class C Notes", and together the "Rated Notes") issued by Sagard Senior Lending Partners RN-U LP (the “Issuer" or the Partnership"). The rating Outlook is Stable. Proceeds of the Notes, along with the LP Interests, are used by the Partnership to invest primarily into middle market corporate loans issued by Sagard Senior Lending Partners-U GP Inc. (the "General Partner or the "GP").
Key Credit Considerations
Asset Coverage: At issuance, Sagard had outlined a pro rata split of 60.0% / 10.0% / 15.0% / 15.0% among its Class A Notes, Class B Notes, Class C Notes and LP Interests. This resulted in Asset Coverage/LTVs 166.7%/60.0%, 142.9%/70.0% and 117.6%/85.0% for the Rated Notes, respectively. As of June 30, 2025, inclusive of deferred interest and the pro-rata portion of the subscription facility, the Borrower had Asset Coverage/LTVs of 166.4%/60.1% for the Class A Notes, 142.6%/70.1% for the Class B Notes and 117.2%/85.4% for the Class C Notes.
Asset Quality: Master Fund assets for this transaction are comprised of loans to middle market companies across the United States. KBRA analyzed the current portfolio of investments in the Partnership as of June 30, 2025, and determined that the asset quality remains consistent with an expected cumulative default rate of 27.7%, compared to 29.0% of the assumed sample portfolio at issuance.
Final Portfolio Composition Dependent on Successful Deployment: KBRA’s expectations of the portfolio’s credit profile were based on assumptions and information provided by Sagard with regard to the Partnership’s portfolio composition expectations. In the event the final portfolio does not reflect a similar size, diversity, yield, and credit profile as assumed, KBRA’s view of the asset quality of the underlying loans may change.
Liquidity: The Partnership holds, and is expected to hold, investments for which no public market exists thus limiting price discovery. As a result, the valuations for these investments are generally reliant on the valuation methodologies of Sagard. The Partnership utilizes an independent third-party valuation agent to value all investments on a quarterly basis. To that extent, assigned values can be meaningfully different than actual realized values if and when investments are liquidated.
Manager Experience: Sagard Holdings Management Inc. (“Sagard” or the “Firm”) is a multi-strategy alternative asset management firm with more than $32 billion under management, 200 portfolio companies, and 440 professionals (as of June 30, 2025). The Firm has offices in Canada, the United States, Europe, and the Middle East. The Firm operates across four separate asset classes: Venture Capital, Private Equity, Private Credit and Real Estate.
Rating Sensitivities
Significant Increase in Asset Coverage: A rating upgrade may occur if there is stable Fund performance and significant de-leveraging of the Notes driven by repayment of the Rated Notes, thereby increasing asset coverage/decreasing LTV.
Underperformance of Fund Collateral: A rating downgrade may occur if the Fund collateral exhibits sustained underperformance, LTV increases, or sustained periods of interest deferrals due to Noteholders.
Underlying Borrower Performance: A rating upgrade may occur if the overall weighted average credit quality of the underlying borrowers increases over time.
Final Portfolio Composition Inconsistent with Expectations: In the event the final portfolio does not reflect a similar size, diversity, yield, and credit profile as expected, KBRA’s view of the underlying loans’ asset quality may change, which may impact the ratings assigned.
Changes to Underwriting Terms: KBRA’s assessment of Sagard’s performance, including, but not limited to, a substantial change in investment strategy or key personnel which may adversely impact performance or underwriting could be a possible source of downward rating pressure. Sagard’s ability to underwrite loans for the Partnership with higher credit quality or favorable terms, including, but not limited to, significantly lower maximum LTVs and additional lender protections, could positively influence KBRA’s view on the ultimate quality of the Partnership’s collateral. Conversely, changes to Sagard’s underwriting standards or its ability to underwrite at less favorable terms could negatively influence KBRA’s view on the Partnership’s collateral.
To access ratings and relevant documents, click here.
Click here to view the report.