KBRA Assigns Ratings to ABPCI Direct Lending Fund ABS IV LP
29 Apr 2024 | New York
KBRA assigns ratings to four classes of notes issued by ABPCI Direct Lending Fund ABS IV LP ("ABPCI IV"), a securitization backed by a portfolio of recurring revenue loans, middle market loans, and hybrid asset-based loans.
ABPCI IV is a $300.0 million securitization managed by AB Private Credit Investors LLC (“ABPCI” or the “Collateral Manager”). The securitization consists of $148.0 million Class A-1 Notes, $44.0 million Class A-2 Notes, $30.0 million Class B Notes, $18.0 million Class C Notes and $60.0 million Subordinated Notes, which are expected to receive payments from a portfolio of recurring revenue loans (“RRLs”), middle market loans (“MMLs”) and a small portion of hybrid asset-based loans (“HABLs”).
The collateral in ABPCI IV may contain up to 80% RRLs and HABLs combined. The RRL strategy focuses on first-lien senior loans to software and technology companies with a minimum level of recurring revenue and low loan-to-value (LTV) ratios. Despite the low level of earnings, the obligors in the portfolio usually have strong liquidity profiles and loan covenants. The portfolio presented to KBRA contains exposures to 63 obligors and has an overall K-WARF of 3579, which equates to a weighted average portfolio assessment between B- and CCC+.
ABPCI is an investment adviser and a subsidiary of Alliance Bernstein L.P., established in 2014. ABPCI’s direct lending platform has over $25 billion in gross commitments across over 550 transactions and $16 billion of capital available for investment. ABPCI currently manages approximately $5.6 billion in syndicated CLOs. As of December 2023, ABPCI has invested approximately $14.3 billion within the technology and software industry vertical.
KBRA’s ratings on the Class A-1, A-2, and B Notes considers timely payment of interest and ultimate payment of principal by the applicable stated maturity date. KBRA’s rating on the Class C Notes considers ultimate payment of interest and principal by the applicable stated maturity date.
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