KBRA Releases Research – Private Credit: Maturity Matching—Rated Notes and Evergreen Funds

KBRA releases research that provides a close examination of feeder fund rated notes that invest in evergreen funds, which have captured an increasing share of private credit capital in recent years. Unlike traditional closed-end funds, evergreen funds are perpetual with no fixed term. They typically permit new investors to periodically subscribe and allow existing investors to redeem their units at regular intervals, usually subject to notice periods and fund-level gates.

KBRA has recently received an increasing number of requests to rate feeder fund rated notes to private credit evergreen funds, including business development companies (BDC) and interval funds. As of April 30, 2025, KBRA has assigned ratings to seven feeder fund transactions that invest in evergreen master funds, totaling $2.1 billion in debt and equity commitments. These structures introduce certain unique considerations to our analytical process. Traditional closed-end funds typically do not need to provide investors with redemption options and have lifespans that generally align with those of their related feeder fund rated notes. Conversely, evergreen funds must provide liquidity to service periodic investor redemptions; there is also a mismatch between the evergreen fund’s indefinite life and the rated notes’ legal maturity. This KBRA report focuses on discussing these issues.

Click here to view the report.

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