KBRA Assigns Preliminary Ratings to Ares European Direct Lending CLO 1 Sarl
6 Jun 2025 | London
KBRA UK (KBRA) assigns preliminary ratings to four classes of notes issued by Ares European Direct Lending CLO 1 Sarl, a cash flow collateralized loan obligation (CLO) backed by a diversified portfolio of middle market corporate loans. This transaction is the first publicly rated UK middle market CLO and the first European private credit CLO to feature a reinvestment period.
Ares European Direct Lending CLO 1 Sarl is managed by Ares Management Limited (“Ares” or the “collateral manager”) and will have a 4.7-year reinvestment period. The legal final maturity dates of the notes are staggered, with the senior rated notes having earlier stated maturity dates than the more subordinated notes. The ratings reflect initial credit enhancement levels, excess spread, and coverage tests including overcollateralization ratio and interest coverage tests.
The collateral in Ares European Direct Lending CLO 1 Sarl will mainly consist of middle market loans issued by corporate obligors diversified across sectors. The total portfolio par amount is $280 million with exposure to 57 obligors. The obligors in the portfolio have a K-WARF of 3125, which represents a weighted average portfolio credit assessment of approximately B-.
Ares is a wholly owned subsidiary of Ares Management LLC established in 1997. Ares employs the resources of its European Direct Lending credit team, which manages the European Direct Lending credit funds for the Ares Credit Group. The Ares Credit Group is a leading manager of credit strategies across the global credit universe, with approximately $348.8 billion of AUM and approximately 285 funds as of December 2024. Ares offers a range of investment strategies across the liquid and illiquid credit spectrum and is one of the largest self-originating direct lenders to the U.S. and European middle markets.
The preliminary ratings on the Class A, B, C, and D Notes consider the timely payment of interest and the ultimate payment of principal by the applicable legal final maturity date.
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