KBRA Assigns Preliminary Ratings to Golub Capital Partners ABS Funding 2024-1
1 Feb 2024 | New York
KBRA assigns preliminary ratings to two classes of notes issued by Golub Capital Partners ABS Funding 2024-1 (GCPAF 2024-1), a securitization backed by a portfolio of recurring revenue and middle market corporate loans.
GCPAF 2024-1 is an approximate $350.0 million securitization managed by GC Investment Management LLC (“GCIM” or the “Collateral Manager”), an investment adviser and affiliate of GC Advisors LLC (collectively, with these affiliates and other funds managed by them and their affiliates “Golub Capital”). The securitization consists of $224.0 million Class A notes, $35.0 million Class B notes, and $91.0 million of Subordinated Notes, which expect to receive payments from a portfolio of recurring revenue loans (“RRLs”) and middle market loans (“MMLs”). The reinvestment period is approximately two years from the closing date. The ratings reflect initial credit enhancement levels, excess spread, and structural features.
Golub Capital’s recurring revenue lending strategy focuses on first-lien senior secured loans to business-to-business software and health care service companies with a minimum level of recurring revenue and low loan-to-value ratios. Despite the low level of earnings, the obligors in the portfolio usually have strong liquidity profiles and loan covenants. The Class A and B Notes have a 64.0% and 74.0% advance rate, respectively. The overall K-WARF of the portfolio is 3368, which represents a weighted average portfolio assessment between B- and CCC+. The portfolio presented to KBRA contains exposures to 47 obligors with approximately 71.9% of the par exposed to RRLs.
GC Investment Management LLC is an investment adviser established in 2010. GCIM is a USVI company providing investment management, fund accounting, operational and administrative services to manage certain of Golub Capital’s offshore funds. Through services agreements, the collateral manager will leverage the Golub Capital platform, including its investment professionals and other resources. Founded in 1994, Golub Capital has over $60 billion in capital under management as of October 31, 2023 with over $33 billion in middle market direct lending and over $12 billion in broadly syndicated leveraged loans since 2013.
KBRA’s ratings on the Class A and Class B Notes considers timely payment of interest and ultimate payment of principal by the applicable stated maturity date.
To access rating and relevant documents, click here.
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