NEW YORK--(BUSINESS WIRE)--KBRA assigns an issuer credit rating of BBB- to HG Global Ltd. and a long-term credit rating of BBB to the $150 million Senior Secured Term Loan. The Outlook for both ratings is Stable.
HG Global Ltd. (“HG Global”) is issuing a Term Loan (the “Loan”) in the aggregate principal amount of $150 million. The Loan is anticipated to close on March 31, 2022, with funding on or before May 31, 2022.
The Loan is secured by a first priority interest in the capital stock of HG Global’s wholly-owned subsidiary HG Holdings Ltd. (“HG Holdings”) which in turn has access to (i) all accrued interest on Build America Mutual’s (“BAM’s”) surplus notes that is held outside of the collateral trusts and (ii) all releases of excess funds from the collateral trusts at its wholly owned reinsurance subsidiary HG Re Ltd. (“HG Re”). The transaction requires the maintenance of an Interest Reserve Account containing eight quarters of interest payments, which will serve as a liquidity buffer at the HG Global level to cover potential timing mismatches from available cash flows and debt service on the Loan.
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Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
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Information on the meaning of each rating category can be located here.
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