KBRA Releases Research – Funds: Subscription Facilities in Focus

LONDON--(BUSINESS WIRE)--KBRA releases a report that provides an overview of subscription facilities and their categories, examines credit focal points, and assesses the state of this sector in light of mounting macroeconomic headwinds. KBRA currently rates more than 40 subscription facilities, including traditional capital call facilities as well as hybrid facilities, with ratings ranging from BBB to AA-.

Subscription facility origination has seen notable accelerated growth in recent years, commensurate with private capital assets under management (AUM). This partly stems from the growing presence of alternative capital providers that now lend in this market to offset the capacity and regulatory constraints facing banks. Some of these nontraditional lenders prefer investing in rated debt instruments, which has contributed to the increased interest in ratings for subscription facilities. Despite macroeconomic headwinds, we expect that the performance of KBRA-rated subscription facilities will be meaningfully insulated and that the credit quality of these facilities will remain stable due to underlying limited partners’ (LP) credit quality, diversification within the LP base, and protective structural features.

Click here to view the report.

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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.