KBRA Affirms Ratings for BlackRock Private Credit Fund

KBRA affirms the issuer and senior unsecured debt ratings of BBB- for BlackRock Private Credit Fund ("BDEBT" or "the company"). The rating Outlook is Stable.

Key Credit Considerations

The ratings are supported by BDEBT’s ties to BlackRock, Inc.'s (NYSE: BLK) $220 billion credit platform further enhanced by BLK's recent acquisition of HPS Investment Partners ("HPS"). At the time of acquisition, HPS had $148 billion of assets focused on direct lending, boosting direct lending assets to $122 billion, which strengthens the BlackRock Credit platform through scale, as well as adding senior leadership to the investment committee and an experienced workout team.

BDEBT maintains SEC exemptive relief to co-invest among certain BlackRock credit affiliates and investment vehicles, allowing BDEBT to compete in the highly competitive industry through size and scale. Also supporting the ratings is the company’s diversified $1.7 billion investment portfolio at fair value (FV), comprised almost exclusively of senior secured first lien loans (99.8%) to 243 portfolio companies across 30+ sectors. BDEBT focuses on investing in the core middle market (portfolio companies with $25 million-$125 million EBITDA), a comparatively less competitive segment with higher yields than the upper middle market segment. The top three portfolio sectors, generally considered less cyclical, are Professional Services (15.1%), Software (13.1%), and Diversified Financial Services (10.5%). With an unseasoned portfolio, non-accruals were low at 0.3% and 0.2% at cost and FV, respectively, as of June 30, 2025.

BDEBT’s funding mix is diversified with a secured revolving bank facility, an SPV asset facility, and senior unsecured notes, including an upcoming issuance, which will boost unsecured debt to total debt, providing lower asset encumbrance for the benefit of senior unsecured noteholders and increased financial flexibility. BDEBT’s gross and net leverage were low at 0.87x and 0.83x, respectively, and lower than the company’s target net leverage range of 0.90x-1.20x. As the company deploys capital, KBRA expects leverage to continue to increase but stay within the target range. As of June 30, 2025, asset coverage was solid at 214% when considering its 150% regulatory asset coverage requirement, providing the company with a significant cushion to withstand increased market volatility in a less favorable economic environment. As of June 30, 2025, the company had solid liquidity with $336 million in available credit lines and $30.7 million of cash set against $364.5 million of unfunded commitments and no near-term debt maturities. Presently, about 28% of assets are classified as Level 2 (19% as BSL, which adds another layer of liquidity). BDEBT's long-term BSL target is 10%.

Counterbalancing the strengths is the company’s short operating history with an unseasoned portfolio, relatively illiquid assets, retained earnings constraints as a RIC, and uncertain economic environment with high base rates, inflation, and geopolitical risks.

Incorporated in 2021 as a Delaware statutory trust, the company is a non-traded perpetual, continuously offered management investment company that has elected to be treated as a business development company regulated under the Investment Company Act of 1940 and treated as a RIC for tax purposes, which, among other things, must distribute to its shareholders at least 90% of the company's investment company taxable income. BDEBT is externally managed by BlackRock Capital Investment Advisors, LLC, a wholly-owned, indirect subsidiary of BLK.

Rating Sensitivities

Given the Stable Outlook, a rating upgrade is not expected over the medium term. However, positive rating momentum could be achieved over time if credit metrics remain solid as the portfolio seasons, leverage remains near the target range, and senior secured loans remain a high proportion of the company's total investments. A rating downgrade and/or Outlook change to Negative could occur if management alters its stated strategy by increasing focus on riskier investments coupled with higher leverage metrics. A prolonged downturn in the U.S. economy with negative impact on the company's earnings performance, asset quality, and leverage and/or a change in credit monitoring could also precipitate negative rating action.

To access ratings and relevant documents, click here.

Methodologies