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KBRA Affirms BBB Rating for Matching Fund Special Purpose Securitization Corporation Matching Fund Securitization Bonds

23 Jul 2026   |   New York

Contacts

KBRA affirms the long-term rating of BBB with a Stable Outlook for the Matching Fund Special Purpose Securitization Corporation Matching Fund Securitization Bonds.

Key Credit Considerations

Credit Positives

  • The Bonds are provided adequate coverage by the Matching Fund Receipts of about 2.28x MADS as of FY 2026.
  • The combination of the Act, the bankruptcy remoteness of the Corporation, the Sale Agreement, and the Indenture provide the Bonds with a strong legal framework that KBRA believes will substantially insulate the pledged Matching Fund Receipts and the Corporation from the credit risk of the Virgin Islands.
  • The ABT of 3.0x prevents the Corporation from diluting the cushion provided by the pledged revenues.
  • The U.S. Treasury is expected to deposit the full amount of budgeted Matching Fund Receipts in a restricted account with the trustee prior to the start of each fiscal year.

Credit Challenges

  • Pledged receipts remain vulnerable to changing U.S. consumer preferences for rum and/or the failure of one or more of the rum producers.
  • The pledged revenues are not broad and diversified. They consist of rum sales from only two rum companies based in the Virgin Islands to U.S. mainland consumers.
  • Further, unlike the pledged Matching Fund Receipts, the ongoing payments to the rum companies funded from the Government’s Residual Certificate receipts are not bankruptcy remote, introducing the risk that payments could be interrupted or delayed.

Rating Sensitivities

For Upgrade

  • Sustained stabilization or growth in rum sales resulting in improved MADS coverage.

For Downgrade

  • Further deterioration in Matching Fund Receipts resulting in a further decline in MADS coverage.

To access ratings and relevant documents, click here.

Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1016109