KBRA Releases Commentary – Subscription Lines: Why Are Ratings Needed?

LONDON--(BUSINESS WIRE)--KBRA releases a commentary exploring aspects of the subscription line market, including why this space has seen a sizable increase in ratings in recent years.

KBRA has been active in rating subscription lines/capital call facilities for over six years. The article discusses the various use cases for ratings, specifically the nuances when bank lenders request ratings for capital management purposes. In recent years, banks, mostly non-US, have come under increased scrutiny for the capital consumed by their fund finance businesses, and they are starting to be subjected to the same rigour as other forms of corporate lending.

Ratings assist with the distribution of risk in the subline space, which allows banks to recycle their capital and balance sheet capacity more effectively. Ratings also appeal to other banks outside the initial syndicate, as well as insurance companies, which may employ ratings for the calculation of capital consumption.

Click here to view the report.

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1007602