KBRA Assigns Preliminary Ratings to VCP RRL ABS II, LLC (Reset)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to four classes of debt issued by the reset of VCP RRL ABS II, LLC (VCP-II-R), a securitization backed by a portfolio of recurring revenue and middle market corporate loans.

VCP-II-R is an approximate $550.0 million securitization managed by Vista Credit Partners, L.P. (“VCP” or the “Collateral Manager”), an investment adviser and affiliate of Vista Equity Partners (collectively, with these affiliates and other funds managed by them and their affiliates “Vista”).

The securitization consists of $43.5 million Class A-L-R Loans, $325.0 million Class A-2-R Notes, $60.5 million Class B-R Notes, $38.5 million Class C-R Notes (collectively the “Debt”) and $82.5 million Subordinated Notes. The Debt is expected to receive payments from a portfolio of recurring revenue loans (“RRLs”) and middle market loans (“MMLs”). The transaction is static and does not feature a reinvestment period, though there is limited flexibility to make collateral substitutions. The ratings reflect initial credit enhancement levels, excess spread, and structural features.

This is a reset of VCP’s second securitization collateralized predominately by RRL and MML. The RRL strategy focuses on first lien senior loans to technology and software companies that have a minimum level of recurring revenue and low loan-to-value (LTV) ratios.

The Classes A-R, B-R and C-R Debt have a 67.0%, 78.0%, and 85.0% advance rate respectively. KBRA determined a credit assessment for each asset in the initial portfolio. At closing, the portfolio is expected to have a K-WARF of 3652, which equates to a weighted average assessment between B- and CCC+.

KBRA’s ratings on the Class A-L-R Loans and Class A-2-R Notes (collectively “Class A-R”), and the Class B-R Notes consider the timely payment of interest and ultimate payment of principal by the applicable stated maturity date. The ratings on the Class C-R Notes consider the ultimate payment of interest and ultimate payment of principal by the applicable stated maturity date.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies

• Structured Credit: Structured Credit Global Rating Methodology
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

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.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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