KBRA Assigns Ratings to Golub Capital Partners ABS Funding 2022-1
16 Dec 2024 | New York
KBRA assigns ratings on three classes of notes issued by Golub Capital Partners ABS Funding 2022-1 (“GCPAF 2022-1”), a securitization backed by a portfolio of recurring revenue loans ("RRLs") and middle market corporate loans ("MMLs"). This transaction, which originally closed in September 2022, will reset the terms of the CLO including the stated maturity, non-call period, reinvestment period, note interest rates and notional balances.
GCPAF 2022-1 is an approximate $450.0 million securitization managed by GC Investment Management LLC (“GCIM” or the “Collateral Manager”), an investment adviser and affiliate of GC Advisors LLC (collectively, with these affiliates and other funds managed by them and their affiliates “Golub Capital”). The securitization consists of $25.0 million Class A-1-R variable funding notes, $250.5 million Class A-2A-R floating-rate notes, $17.0 million Class A-2B-R fixed-rate notes, $40.5 million Class B-R fixed-rate notes, and $128.0 million of Class A and B Subordinated Notes. The reinvestment period is approximately two years from the closing date. The ratings reflect initial credit enhancement levels, excess spread, and structural features.
Golub Capital’s recurring revenue lending strategy focuses on first-lien senior secured loans to business-to-business software and health care service companies with a minimum level of recurring revenue and low loan-to-value ratios. Despite the low level of earnings, the obligors in the portfolio usually have strong liquidity profiles and loan covenants. The overall K-WARF of the portfolio is 3461, which represents a weighted average portfolio of B-. The portfolio presented to KBRA contains exposures to 59 obligors with 56.5% of the par exposed to the RRLs.
GC Investment Management LLC is an investment adviser established in 2010. GCIM is a USVI company providing investment management, fund accounting, operational and administrative services to manage certain of Golub Capital’s offshore funds. Through services agreements, the collateral manager will leverage the Golub Capital platform, including its investment professionals and other resources. Founded in 1994, Golub Capital has over $70 billion in capital under management as of June 30, 2024 with over $55 billion in middle market direct lending and recurring revenue direct lending loans, and over $10 billion in broadly syndicated leveraged loans since 2013.
KBRA’s ratings on the Class A-1-R, Class A-2A-R, Class A-2B-R, and Class B-R Notes considers timely payment of interest and ultimate payment of principal by the applicable stated maturity date.
KBRA analyzed the transaction using the Structured Credit Global Rating Methodology, the Global Structured Finance Counterparty Methodology, and the ESG Global Rating Methodology.
To access ratings and relevant documents, click here.
Click here to view the report.