KBRA Assigns Senior Unsecured Debt Rating to Ripple Prime CIV US BD HoldCo LLC

NEW YORK--(BUSINESS WIRE)--KBRA assigns a senior unsecured debt rating of BBB with a Stable Outlook to Ripple Prime CIV US BD HoldCo LLC ("the company"), the intermediate holding company for its primary operating subsidiary, Hidden Road Partners CIV US LLC ("Ripple Prime US" or "the firm"). The firm is an SEC-registered broker-dealer, CFTC-registered futures commission merchant (FCM), a member of FINRA and SIPC, a clearing member of CME Group exchanges, and a member of the FICC Government Securities Division. KBRA previously assigned BBB issuer ratings to both the company and the firm on April 2, 2026.

Key Credit Considerations

The senior unsecured debt rating of BBB reflects no notching from the company's issuer rating, reflecting KBRA's view that recovery prospects for senior unsecured creditors are broadly consistent with the issuer rating.

The issuer rating for Ripple Prime US recognizes that its business model is in a scaling phase, focused primarily on clearing and intermediation services within its exchange-traded derivatives (ETD) platform, launched in 2024, as well as similar activities within fixed income repo, which reached meaningful scale in 2025 and are centered on short-duration U.S. Treasuries and agency securities.

The balance sheet has grown significantly over the past twelve months, and the firm achieved profitability in 2025, supported by substantial capital injections (~$500 million) from Ripple Labs, Inc. (“Ripple”), the ultimate parent, following its acquisition of Hidden Road in late 2025 (dba Ripple Prime). While the firm’s activities are more concentrated than those of similarly rated peers, management brings a proven track record and has articulated a strategy to diversify the platform through new business lines and the addition of experienced personnel.

Alignment of the operating company and holding company issuer ratings reflects expected parental support. In KBRA’s view, in the event of a debt issuance, if regulatory or liquidity constraints were to limit dividends from the operating company, Ripple would likely provide financial support given Ripple Prime's strategic importance and the level of capital invested to date. The parent’s strong financial backing is therefore a key consideration in both ratings.

Ripple maintains a strong capital position (nearly $5.0 billion in cash as of 3Q25), in addition to XRP holdings (over 40 billion units as of 3Q25), providing substantial unrecognized value. Profitability at the parent has been favorable in recent years, although earnings are largely driven by digital asset activity, including XRP sales. As such, revenues remain concentrated and may be sensitive to price volatility and liquidity conditions, particularly during a prolonged digital asset downturn.

The earnings profile at Ripple Prime is in an early growth phase; however, margins are expected to improve in 2026 as the balance sheet expands, supported, in part, by additional capital contributions from Ripple (~$500 million) and operating leverage is realized. Revenues remain concentrated in spread-based financing activities and are sensitive to balance sheet size and interest rate dynamics; however, expansion into new business lines, including Delta1 (total return swaps and synthetic equity financing for leveraged ETF providers) and equity prime brokerage, is expected to support revenue diversification over time. If achieved, profitability would compare favorably with similarly rated peers.

Primary risks include counterparty and liquidity exposures, which are mitigated by the matched-principal model, high-quality repo collateral, centrally cleared ETD positions, conservative exposure-at-default limits, and real-time monitoring supported by the firm’s technology infrastructure. The short-duration nature of the financing book further supports disciplined liquidity management.

Capitalization strengthened materially following the acquisition and is considered adequate relative to the firm’s risk profile. While gross leverage appears elevated due to the matched-book structure, leverage is more moderate on an adjusted basis. The firm consistently maintains substantial excess net capital relative to SEC requirements, providing a meaningful cushion to support continued balance sheet growth, absorb market volatility, and maintain regulatory compliance as the platform expands into additional financing and clearing activities.

Rating Sensitivities

An upgrade is unlikely in the near term; however, sustained execution at projected scale, demonstrated durability of earnings, and greater revenue diversification could support positive momentum over time. A downgrade could result from earnings deterioration, a weakened liquidity or capital position, or reduced parental support. Greater risk-taking, inconsistent with its current risk profile could also pressure ratings.

To access ratings and relevant documents, click here.

Methodology

• Financial Institutions: Securities Firm Global Rating Methodology

Disclosures

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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