-

KBRA Releases Research – Recurring Revenue Loan Metrics Dashboard

NEW YORK--(BUSINESS WIRE)--KBRA releases a report that tracks several reported metrics within recurring revenue loan (RRL) securitizations.

Several large middle market collateral managers over the past decade have developed dedicated direct lending strategies to provide financing solutions to high-growth companies, typically within the software and technology sectors. Often referred to as late-stage or recurring revenue lending (RRL), this niche asset class’s investment thesis generally relies on underwriting to annual recurring revenue (ARR) compared with more traditional EBITDA-based metrics. Increasingly, the originators of RRLs have pursued capital markets debt financing for their portfolios, typically utilizing an asset-backed securitization (ABS) structure. These transactions comprise approximately 60% of RRLs on average by par balance.

In this report, KBRA tracks several key metrics sourced from quarterly collateral loan tapes provided by the issuers, in dashboard form. Changes in such metrics can, over time, provide an indication of the general health and credit quality of the securitized portfolios.

Key Takeaways

  • On an aggregate basis, annual recurring revenue for the borrowers in the dashboard has grown by approximately 35% year-over-year (YoY). The debt-to-recurring revenue ratio is down quarter-over-quarter (QoQ) and has increased by a modest 3.6% YoY.
  • Balance sheet cash is up approximately 70% YoY. Liquidity cushion, which typically measures cash and capacity under undrawn revolvers, is up approximately 2% over the same period and remains above the historical average.
  • The average loan-to-value (LTV) ratio was generally stable YoY (around 26%) but is trending upward.
  • The weighted-average life (WAL) of the loans has been steadily increasing but has leveled off in the past four years.
  • The all-in rate reported for the borrowers in the dashboard is 10.3%, up 3% YoY.
  • Interest payment-in-kind (PIK) has trended upward, albeit mildly. Approximately one-third of the RRLs in the dashboard currently report a PIK balance. There are currently no reported delinquencies or defaults.

Click here to view the report.

Related Publications

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

Contacts

Contacts

Sean Malone, CFA, Managing Director
+1 (646) 731-2436
sean.malone@kbra.com

Peter Connolly, Director
+1 (646) 731-1283
peter.connolly@kbra.com

Eric Hudson, Senior Managing Director, Head of Global Structured Credit Ratings
+1 (646) 731-3320
eric.hudson@kbra.com

Eric Thompson, Senior Managing Director, Head of Global Structured Finance Ratings
+1 (646) 731-2355
eric.thompson@kbra.com

Business Development Contact

Jason Lilien, Managing Director
+1 (646) 731-2442
jason.lilien@kbra.com

KBRA

Details
Headquarters: New York City, New York
CEO: Jim Nadler
Employees: 400+
Organization: PRI

Release Versions

Contacts

Contacts

Sean Malone, CFA, Managing Director
+1 (646) 731-2436
sean.malone@kbra.com

Peter Connolly, Director
+1 (646) 731-1283
peter.connolly@kbra.com

Eric Hudson, Senior Managing Director, Head of Global Structured Credit Ratings
+1 (646) 731-3320
eric.hudson@kbra.com

Eric Thompson, Senior Managing Director, Head of Global Structured Finance Ratings
+1 (646) 731-2355
eric.thompson@kbra.com

Business Development Contact

Jason Lilien, Managing Director
+1 (646) 731-2442
jason.lilien@kbra.com

More News From KBRA

KBRA Releases Monthly CMBS Trend Watch

NEW YORK--(BUSINESS WIRE)--KBRA releases the November 2025 issue of CMBS Trend Watch. With the Federal Reserve’s December meeting drawing near, market participants will be closely watching the central bank’s policy decision and guidance to aid in their projections for 2026. Meanwhile, declining borrowing costs in 2025 have contributed to healthy commercial real estate (CRE) securitization issuance. For commercial mortgage-backed securities (CMBS), the $115.2 billion of issuance year-to-date (YT...

KBRA Releases Slide Deck for 2026 U.S. SF Sector Outlooks

NEW YORK--(BUSINESS WIRE)--KBRA releases a slide deck that summarizes key points from its 2026 U.S. structured finance (SF) Sector Outlooks, which examine major trends from the past year as well as expectations for 2026. SF markets saw continued momentum in new issue volumes in 2025, with primary market supply expected to reach a new post-global financial crisis (GFC) record by year-end. Meanwhile, credit fundamentals have been largely stabilizing across most asset classes. These themes and muc...

KBRA Launches K-SIM, a Web-Based Platform for Structured Credit Modeling and Deal Analysis

NEW YORK--(BUSINESS WIRE)--KBRA is pleased to announce the launch of K-SIM, our cash flow simulation tool designed to simulate structured credit cash flows with clear, transparent analytics. This next-generation, web-based platform allows market participants to independently model and evaluate structured credit transactions using the same cash flow analysis engine employed by KBRA rating analysts. Replacing the legacy K-PAT tool, K-SIM represents a major advancement in KBRA’s structured credit...
Back to Newsroom