KBRA Affirms Ratings for Crescent Capital BDC, Inc.

KBRA affirms the issuer and senior unsecured debt ratings of BBB for Crescent Capital BDC, Inc. (NASDAQ: CCAP) (“the company"). The rating Outlook is Stable.

Key Credit Considerations

The ratings are supported by the company’s ties to its credit investment platform, Crescent Capital Group LP ("CCG"), which is an investment management company with ~$50 billion in AUM, ~$39 billion of which is comprised of private credit AUM, which provides CCAP with the benefit of scale through SEC exemptive relief to co-invest alongside other accounts across the platform. Furthermore, Sun Life Financial Inc. (NYSE: SLF), a CAD $1.6 trillion Canadian life insurance and asset management company, which acquired a 51% interest in the Crescent platform ("the platform") in 2021 and intends to acquire the remaining 49% in 2026, plays a valuable role in providing seed capital and investing in the debt of its fund vehicles as well as facilitating Canadian banking relationships. In the case of CCAP, SLF owns about 6% of its publicly traded equity and ~$87 million of its senior unsecured debt. The ratings also consider CCAP's long operating history (one of the longest in the sector) with a strong management team that has a sound track record with an average tenure of Crescent’s leadership of 20 years and solid risk management practices.

As of December 31, 2025, CCAP had a well-diversified $1.6 billion investment portfolio comprised predominantly of senior secured first lien loans, including first-out unitranche loans (90.8%), increasing substantially from 77% at YE 2020. The investment portfolio consists of 184 portfolio companies across 18 sectors, with median EBITDA of $29 million, and nearly all deals (99%) are sponsor backed. The company focuses on providing loans to the core and lower-middle market where there is less competition and generally to portfolio companies in less cyclical businesses that have solid cash flow, stable operating history, and are mission critical. Health Care Equipment & Services (27.3%), Software & Services (20.3%), and Commercial & Professional Services (15.4%) comprise the three top sector concentrations. Though recently elevated, non-accruals were acceptable at 3.9% and 1.8% at cost and fair value, respectively, as of December 31, 2025. The increase in non-accrual investments is partially attributable to portfolio companies subject to the tariffs imposed during the first half of 2025. Notably, two non-accrual investments were resolved in 1Q26 through sale and restructuring, reducing pro forma non-accrual investments to 3.0% and 1.2% at cost and fair value, respectively.

Further supporting the ratings is the diverse funding mix, strong banking relationships, and access to the capital markets. As of December 31, 2025, the company’s liquidity was adequate, with $242 million in available bank lines and $5 million of unrestricted cash and cash equivalents. CCAP issued $135 million of senior unsecured notes in 1Q26 to refinance $135 million in senior unsecured notes that matured February 2026. An additional $50 million in senior unsecured notes matures later this year (July) and will be refinanced with a senior unsecured debt issuance that has already been priced and is expected to fund in May while the $111.6 million FCRX unsecured notes (publicly traded notes acquired by CCAP in the 2023 acquisition of the First Eagle portfolio) will be refinanced with secured credit lines. CCAP had $211.9 million of unfunded commitments, a portion of which is tied to covenants and transactions and is not expected to be drawn. Gross leverage was 1.25x, within CCAP’s target gross of 1.20x - 1.30x. While the upper range of the company’s target leverage is higher than peers, CCAP intends to remain below 1.30x. Asset coverage was sufficient at 179%, within 150% regulatory minimum, providing an adequate cushion for weaker market conditions.

These credit strengths are counterbalanced by the potential risk related to the company’s illiquid investments, retained earnings constraints as a RIC, and a more uncertain economic environment with high base rates, geopolitical risks, and the potential for increasing non-accruals.

Formed in 2015, Crescent Capital BDC, Inc. is a closed-end publicly traded business development company, regulated under the Investment Company Act of 1940, which, among other things, must distribute to its shareholders at least 90% of the company’s investment company taxable income. CCAP is externally managed by Crescent Cap Advisors, LLC, a subsidiary of CCG. The company’s stock trades on the NASDAQ under the symbol CCAP with a recent market capitalization of ~$470 million. CCG is headquartered in Los Angeles with offices in New York, Boston, Chicago, and London with ~250 employees globally.

Rating Sensitivities

Given the Stable Outlook, a rating upgrade is unlikely over the medium term. Negative rating action is possible if leverage remains elevated for a sustained period with declining credit metrics, including within joint ventures, that could pressure capital and liquidity. A prolonged downturn in the U.S. economy that has impact on performance and non-accrual investments that significantly affect capital, leverage, and liquidity metrics would also negatively impact the rating/Outlook.

To access ratings and relevant documents, click here.

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