KBRA Assigns Ratings to Insurance Private Credit III LLC
26 Jun 2024 | New York
KBRA assigns ratings to two classes of notes issued by Insurance Private Credit III LLC (IPC III LLC), a direct lending facility that will originate and purchase middle market senior secured loans.
IPC III LLC is managed by Goldman Sachs Asset Management, L.P. (GSAM or the collateral manager) and will have approximately 2.15 years remaining in the reinvestment period at the Conversion Date (6/26/2024). The legal final maturity is on October 25, 2036. The ratings reflect expected credit enhancement levels, excess spread, and coverage tests including overcollateralization ratio and interest coverage tests.
The convertible Subordinated Notes may be drawn upon after closing and prior to the Conversion Date. On the Conversion Date, the convertible Subordinated Notes will be converted into a principal amount of Class A and B Notes according to the Target Debt Ratio. Afterward, the structure will be drawn upon on a pro-rata basis to ramp the portfolio further. As debt is drawn to ramp the portfolio, a set of pre-determined tests will govern minimum portfolio credit quality (K-WARF), weighted-average spread (WAS), and weighted-average recovery rate (WARR) of the portfolio. While macroeconomic conditions may impact overall credit quality over time, each individual portfolio acquisition will be tested against the collateral quality tests.
GSAM, through the GSAM Private Credit Group, is a middle market lender which has approximately $113.0 billion in capital under management.
The rating on the Class A Notes considers the timely payment of interest and ultimate payment of principal by the applicable stated maturity date, while the rating on the Class B Notes consider the ultimate payment of interest and principal.
To access rating and relevant documents, click here.
Click here to view the report.