NEW YORK–(BUSINESS WIRE)–On May 12th 2020, Kroll Bond Rating Agency (KBRA) assigned a BBB- issuer rating with a Stable Outlook for Crescent Capital BDC, Inc. (NASDAQ: “CCAP” or “the Company”), a business development company (BDC).
CCAP is a publicly-traded BDC, formed in 2015, that focuses on originating and investing in primarily first lien secured debt of private U.S. middle-market companies. The Company is externally managed by Crescent Cap Advisors, LLC, an affiliate of Crescent Capital Group LP (Crescent) which together with its subsidiaries manages over $28 billion in assets under management, focused on below investment grade credit markets.
The rating reflects Crescent’s well-established franchise in the middle-market lending space, robust origination platform, experienced management team and strong risk management. The rating is also supported by CCAP’s appropriate Debt-to-Equity leverage of 0.92x at March 31, 2020 (1Q20) with a long-term target range of 1.0x-1.3x, solid asset coverage cushion to support growth, adequate liquidity profile with minimal near-term debt maturities and a diversified investment portfolio comprised predominately of first lien secured loans (79% of total investments) at 1Q20. The rating is balanced by CCAP’s limited operating history and a fully secured funding profile as well as the inherent risks associated with operating as a BDC such as distribution requirements that may limit financial flexibility and the illiquid nature of the Company’s portfolio.
The ratings are assigned using KBRA’s Global Finance Company Rating Methodology, published November 28, 2017.
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 U.S. Information Disclosure Form 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 U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
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Teri Seelig, Director
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