Articles from Kroll Bond Rating Agency, LLC

KBRA assigns a rating of BBB- to Crescent Capital BDC, Inc.'s (“CCAP” or “the company”) $115 million senior unsecured notes due in 2028 and 2030. The notes comprise a $35 million, 6.77% tranche and an $80 million, 6.90% tranche with maturities of February 18, 2028, and February 18, 2030, respectively. The rating Outlook is Positive. The notes are being issued in anticipation of 2026 unsecured note maturities.

KBRA assigns a rating of BBB to FS KKR Capital Corp.'s (“FSK” or “the company”) $100 million, 6.125% senior unsecured notes due January 15, 2030, which are an add-on to the $600 million, 6.125% senior unsecured notes with original settlement date of November 20, 2024. The rating Outlook is Stable. The proceeds will be used for general corporate purposes and for repayment of existing indebtedness.

KBRA releases research discussing solid November retail sales growth, the slowly fading labor market, and the stubborn persistence of inflation. This report examines these developments in light of still softening state sales tax receipts and the Federal Reserve's decision to further cut rates in December.

KBRA assigns a long-term rating of AA to the Triborough Bridge and Tunnel Authority Real Estate Transfer Tax Revenue Bonds, Series 2025A (TBTA Capital Outlook Fund). The Outlook is Stable. The rating reflects KBRA's positive view of i) the non-appropriation pledge and statutory dedication of New York City Real Estate Transfer Tax ("RETT") receipts transferred monthly by the State Comptroller to the Central Business District Tolling Capital Lockbox Fund held by TBTA; ii) the sound legal and security provisions of the credit structure; iii) the solid, though volatile, trend of coverage of maximum annual debt service (capped at $150 million) over the four year timeframe of actual receipts; and iv) TBTA's statutory inability to file for bankruptcy protection, and the inability of creditors to file involuntary proceedings against TBTA during the pendancy of the Bonds. Counterbalancing these strengths are the lack of at least five years of historical RETT receipts, and the volatility of annual sales volumes and unit sales subject to the RETT.

On December 9, 2024, Rockland, MA-based Independent Bank Corp. (NASDAQINDB) (“Independent”), parent company of Rockland Trust Company (“Rockland Trust”), and Lowell, MA-based Enterprise Bancorp, Inc. NASDAQ: EBTCNASDAQEBTC)

KBRA assigns preliminary ratings to nine classes of mortgage pass-through certificates from J.P. Morgan Mortgage Trust 2024-NQM1 (JPMMT 2024-NQM1), a $373.3 million non-prime RMBS transaction collateralized by a pool of 734 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 94.1% and 5.9% of the pool, respectively. All loans are either classified as non-qualified mortgages (Non-QM) (74.5%) or exempt (25.5%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer purposes. Although JPMMAC has previously issued deals 100% backed by DSCR loans, this transaction is notable in that it represents the company's first non-QM securitization where not all of the loans were originated for investment purposes.

On December 16, 2024, Berkshire Hills Bancorp, Inc. (NYSEBHLB)(KBRA senior unsecured debt rating: BBB / Stable Outlook), the parent company of Berkshire Bank, and Brookline Bancorp, Inc. NASDAQ: BRKLNASDAQBRKL)

KBRA releases its third-quarter 2024 U.S. Credit Union Compendium, providing the latest view of the U.S. credit union (CU) sector and analysis of 3Q24 results for KBRA-rated CUs.

KBRA assigns issuer and senior unsecured debt ratings of BBB to Morgan Stanley Direct Lending Fund (NYSE: MSDL or "the company"). The rating Outlook is Stable.

KBRA assigns preliminary ratings to three classes of notes issued by ABPCI Direct Lending Fund ABS V LLC ("ABPCI V"), a securitization backed by a portfolio of recurring revenue loans, middle market loans, and hybrid asset-based loans.

KBRA is pleased to announce a new HELOC/CES index that tracks new issue private label securitizations (PLS) backed by home equity lines of credit and closed-end second mortgages. HELOC and CES now account for roughly 4.5% of outstanding private label securitizations (PLS) tracked in KBRA’s U.S. RMBS Credit Indices. With the issuance of transactions backed by these assets likely to rise in 2025, we are introducing a HELOC/CES index to KBRA’s RMBS Credit Indices report, which tracks early- (30-59 days), mid- (60-89 days), and late-stage (90+ days) delinquencies, observed modifications, prepayment speeds, and other performance metrics across the major RMBS 2.0 subsectors.

KBRA announces the assignment of preliminary ratings to six classes of BX 2024-SLCT, a CMBS single-borrower securitization.

KBRA assigns preliminary ratings to 61 classes of mortgage pass-through certificates from PMT Loan Trust 2024-INV2 (PMTLT 2024-INV2), a prime RMBS transaction sponsored by PennyMac Corp. (PennyMac), an indirect, wholly-owned subsidiary of PennyMac Mortgage Investment Trust (PMT). PMTLT 2024-INV2 comprises 1,301 fixed-rate mortgages (FRMs) with an aggregate principal balance of $468,088,481 as of the December 1, 2024 cut-off date. The underlying pool consists of agency-eligible loans that are collateralized by investment properties (73.6%) and second homes (26.4%). The pool is characterized by significant borrower equity in each mortgaged property, as evidenced by the WA original LTV of 73.4%. The weighted average original credit score is 774, which is well within the prime mortgage range.

KBRA is pleased to announce the assignment of preliminary ratings to 13 classes of Benchmark 2024-V12, a $752.2 million CMBS conduit transaction collateralized by 31 commercial mortgage loans secured by 164 properties.

KBRA assigns preliminary ratings to 9 classes of mortgage pass-through certificates from ADMT 2024-NQM6, a $303.9 million non-prime RMBS transaction. The underlying collateral, comprising 872 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. Borrowers in the subject pool possess a non-zero WA original credit score of 743 and exhibit notable equity in each mortgaged property, with a WA combined LTV (CLTV) ratio of 69.5%.

KBRA assigns preliminary ratings to 10 classes of mortgage-backed certificates from Morgan Stanley Residential Mortgage Loan Trust 2024-NQM5 (MSRM 2024-NQM5), a $297.2 million non-prime RMBS transaction. The underlying collateral, comprising of 574 residential mortgages, is characterized by a notable concentration of alternative income documentation (71.7%). The majority of the loans are either classified as non-qualified mortgages (Non-QM) (44.0%) or exempt (43.0%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA assigns a long-term rating of AA+ to the Massachusetts Bay Transportation Authority Subordinated Sales Tax Bonds 2024 Series A (USDOT Loan) Widett Circle Preservation of Right-of-Way and Site Preparation Project (RRIF 2025-0053). KBRA additionally affirms the long-term rating of AAA for the Authority's Senior Sales Tax Bonds. The rating Outlook is Stable.

KBRA assigns preliminary ratings to two classes of notes issued by OWN Equipment Fund I LLC (OWN or the Issuer), an equipment rental ABS transaction.

KBRA assigns preliminary ratings to ten classes of mortgage pass-through certificates from CROSS 2024-H8 Mortgage Trust, an RMBS transaction issued under the Hildene-CCC Loan Acquisition, LLC (CROSS) shelf, where Hildene Capital Management (Hildene) in affiliation with CrossCountry Mortgage (CrossCountry or CCM) and CrossCountry Capital (CCC) sponsored the transaction. The $403.4 million transaction is collateralized by a pool of 824 residential mortgages originated by CCM, including a meaningful concentration of collateral that KBRA considers to be “non-prime” (68.9%), with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 85.2% and 14.8% of the pool, respectively.

KBRA assigns preliminary ratings to 20 classes of mortgage-backed notes from RCKT Mortgage Trust 2024-CES9 (RCKT 2024-CES9), a $451.4 million RMBS transaction, as of the cut-off date, sponsored by Woodward Capital Management LLC, a wholly owned affiliate of Rocket Mortgage, LLC, and FirstKey Mortgage, LLC, and consists entirely of newly originated closed-end second lien mortgages (CES; 100.0%). The underlying pool is seasoned less than one months in average and comprises of 5,142 loans originated solely by Rocket Mortgage, LLC (Rocket). The collateral is characterized entirely by fully amortizing, fixed-rate mortgages (FRMs) with 10-year (5.5%) and 20-year (94.5%) terms.

KBRA assigns preliminary ratings to seven classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2024-13 (AOMT 2024-13), a $288.9 million non-prime RMBS transaction. The underlying collateral, comprised of 627 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. All the loans are either classified as non-qualified mortgages (55.9%) or exempt (44.1%) from the Ability-to-Repay/Qualified Mortgage rule due to being originated for non-consumer loan purposes. Together, Angel Oak Mortgage Solutions and Angel Oak Home Loans, both entities of Angel Oak, originated 36.1% of the pool. No other originator comprised over 15% of the collateral.

KBRA releases its Business Development Company Ratings Compendium, which looks at results for the quarter ended September 30, 2024. This quarter, KBRA reviewed the financial performance of our rated BDCs in a landscape characterized by ongoing competitive pressures, increasing payment-in-kind (PIK) optionality, declining but still high base interest rates, and the potential for distribution/common dividend cuts. We also evaluated asset quality, noting higher unrealized and realized losses for some BDCs despite consistently low non-accrual rates. In 3Q24, the market environment remained characterized by low transaction volumes, significant capital raises by new private credit vehicles, and a strong broadly syndicated loan (BSL) market supported by an active collateralized loan obligation (CLO) market.

KBRA assigns a long-term rating of AAA to the Dormitory Authority of the State of New York State Sales Tax Revenue Bonds, Series 2024B-1 (Tax-Exempt), Series 2024B-2 (Tax-Exempt), and Series 2024C (Federally Taxable). Concurrently, KBRA affirms the long-term rating of AAA on outstanding State Sales Tax Revenue Bonds. The Outlook is Stable.

KBRA assigns preliminary ratings to Jersey Mike's Funding, LLC (the Issuer), Series 2024-1 (Jersey Mike's 2024-1). Jersey Mike's 2024-1 represents the Issuer's third securitization following the establishment of the master trust in December 2019. KBRA anticipates affirming the ratings on the Issuer’s outstanding notes (the Existing Notes and, together with the Series 2024-1 Notes, the Notes).

KBRA assigns a BBB insurance financial strength rating to Universal Life Insurance Company (ULICO). The outlook for the rating is stable. ULICO is an insurance operating entity of Universal Group, Inc., a holding company offering both non-life and life insurance as well as other related services in Puerto Rico.

KBRA releases the November 2024 issue of CMBS Trend Watch.

KBRA releases research on the key takeaways from the 29th annual United Nations Climate Change Conference of the Parties (COP29), held on November 11-22 in Baku, Azerbaijan. The report highlights major developments at COP29, including progress in climate finance, evolving debates over fossil fuels, and ongoing challenges in balancing equity and global collaboration.

KBRA assigns preliminary ratings to 12 classes of Velocity Commercial Capital 2024-6 (VCC 2024-6) mortgage-backed certificates.

KBRA assigns a short-term rating of K1+ to Cobb County School District, Georgia's Short-Term Construction Notes, Series 2025, due December 15, 2025. Proceeds will be applied toward the current expenses of acquiring, constructing, equipping and upgrading various school facilities and improvements approved by voters at referendum, and to pay expenses related thereto until the collection of a 1% sales and use tax for educational purposes (the "Sales Tax", or "Ed-SPLOST").

KBRA assigns preliminary ratings to seven classes of mortgage-backed notes from OBX 2024-NQM18 Trust, a $479.7 million non-prime RMBS transaction. The underlying collateral, comprising 841 residential mortgages, is characterized by a notable concentration of alternative income documentation (84.9%) loans. Most of the loans are classified as non-qualified mortgages (Non-QM) (53.8%) or exempt (43.2%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA assigns preliminary ratings to 8 classes of mortgage-backed notes from New Residential Mortgage Loan Trust 2024-NQM3 (NRMLT 2024-NQM3), a $272.5 million non-prime RMBS transaction sponsored by Rithm Capital Corp. (formerly New Residential Investment Corp.), a publicly traded (NYSERITM) real estate investment trust (REIT). The underlying mortgages in the subject pool were originated by NewRez LLC (71.4%) and Champions Funding, LLC (12.2%). In addition, all loans will be serviced by NewRez LLC d/b/a Shellpoint Mortgage Servicing.

KBRA assigns preliminary ratings to 6 classes of Certificates from EFMT 2024-CES1, a $203.1 million RMBS transaction, as of the cut-off date, sponsored by EFMT Sponsor LLC and consists entirely of newly originated closed-end second lien mortgages (CES; 100.0%). The underlying pool is seasoned approximately 4 months and comprises 2,450 loans originated solely by PennyMac Loan Services, LLC (PennyMac). The collateral is characterized entirely by fully amortizing, fixed-rate mortgages (FRMs) with predominantly 20-year (78.4%) and 30-year (19.6%) maturity terms.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the November 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label commercial mortgage-backed securities (CMBS) in November increased to 5.95%, up 46 basis points (bps) from October. The total delinquent plus current but specially serviced loan rate (collectively, the distress rate) also increased by a slightly lower 30 bps to 8.95%. The jump in rates were driven by a second consecutive month of increases exceeding 100 bps in the office delinquency rate and another $1 billion+ of newly distressed office loans, pushing the overall distress rate in the sector to over 14%.

KBRA assigns preliminary ratings to six classes of mortgage pass-through notes from Verus Securitization Trust 2024-9 (VERUS 2024-9), a $612.3 million non-prime RMBS transaction. The underlying collateral, comprised of 1,289 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. Borrowers in the subject pool possess a non-zero WA original credit score of 742 and exhibit moderate equity in each mortgaged property, with an original combined LTV (CLTV) ratio of 70.2%. Most of the loans are classified as exempt (39.5%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes. The remaining loans are classified as QM: Safe Harbor (APOR) (33.0%), Non-QM (24.4%), or QM: Rebuttable Presumption (APOR) (2.7%).

KBRA assigns preliminary ratings to nine classes of notes issued by Pagaya AI Debt Grantor Trust 2024-11 and Pagaya AI Debt Trust 2024-11 (collectively “PAID 2024-11”), an unsecured consumer loan ABS transaction. PAID 2024-11 has initial hard credit enhancement levels of 71.14% for the Class A Notes to 3.17% for the Class F Notes. Credit enhancement is comprised of overcollateralization, subordination (except for the Class F Notes), a cash reserve account funded at closing, and excess spread.

KBRA is pleased to announce the assignment of preliminary ratings to 13 classes of BMO 2024-5C8, a $991.8 million CMBS conduit transaction collateralized by 40 commercial mortgage loans secured by 98 properties.

KBRA is pleased to announce the assignment of preliminary ratings to 15 classes of BBCMS 2024-5C31, an $872.5 million CMBS conduit transaction collateralized by 39 commercial mortgage loans secured by 55 properties.

KBRA is pleased to announce the assignment of preliminary ratings to four classes of FREMF Series 2024-K167 mortgage pass-through certificates and three classes of Freddie-Mac structured pass-through certificates (SPCs), Series K-167. FREMF 2024-167 is an $1.2 billion CMBS multi-borrower transaction. Freddie Mac will guarantee six classes of certificates issued in the underlying Series 2024-K167 securitization and will deposit the guaranteed underlying certificates into a separate trust that will issue the SPCs.

KBRA releases an updated report that tracks several reported metrics within recurring revenue loan (RRL) securitizations.

KBRA assigns a long-term rating of AAA with a Stable Outlook to Dallas Independent School District, TX's (“DISD” or the “District”) outstanding Unlimited Tax School Building and Refunding Bonds. The long-term credit rating reflects the District’s strong financial management policies and practices guided by an experienced leadership team, favorable financial operating performance supporting solid reserve and liquidity levels, a mature and diverse economic base that has experienced continued growth, particularly in terms of its property taxing base, and what KBRA considers to be a well-managed and conservative debt profile. These strengths are counterbalanced, in part, by a continued trend of enrollment decline.

KBRA releases research discussing October retail sales growth, recent headwinds to employment growth, and the recent uptick in inflation. The report examines these developments in the context of still softening state sales tax receipts and mixed signals from large retailers on expectations for sales growth this holiday season.

KBRA assigns an ‘A-’ rating to the Senior Notes issued by NPC SIP 2024-1 Ltd. (the “Issuer”), a long-dated, General Partner-led Collateralized Fund Obligation (GP CFO) transaction. The total issuance amount is $427 million, resulting in an initial Loan-to-Value ratio of approximately 85.7% for the Senior Notes. NPC SIP 2024-1 Ltd. will be managed by Churchill Asset Management, who will utilize Nuveen and Arcmont Asset Management to invest in private credit and private equity strategies. This transaction will have a legal maturity of 30 years with a 25-year investment period to allocate proceeds into various assets.

KBRA assigns preliminary ratings to five classes of notes issued by Continental Finance Credit Card ABS Master Trust, Series 2024-A (“CFCCMT Series 2024-A”), a credit card asset-backed securitization.

KBRA assigns a rating of BBB to MSD Investment Corp.'s ("MSD" or "the company" or "the BDC") $265 million senior unsecured notes that are comprised of three tranches. The three tranches include a $50 million SOFR +3.00% floating rate note due May 20, 2028, a $165 million 7.11% fixed rate note due May 20, 2030, and a $50 million SOFR + 3.35% floating rate note due May 20, 2030. The rating Outlook is Stable. The proceeds will be used to make new investments and to pay down existing debt.

KBRA assigns preliminary ratings to four classes of notes issued by Golub Capital Partners ABS Funding 2022-1 (GCPAF 2022-1), a securitization backed by a portfolio of recurring revenue and middle market corporate loans.

KBRA releases its 2025 ABS Sector Outlook, which discusses our expectations for new issue supply in 2025 and provides our views on credit fundamentals among each of the major sectors where KBRA is most active. We also discuss year-to-date (YTD) KBRA-rating trends and metrics, take a closer look at 2024 ratings activity, and provide our expectations for 2025, including factors that may affect credit performance.

KBRA assigns preliminary ratings to 10 classes of mortgage-backed certificates from Morgan Stanley Residential Mortgage Loan Trust 2024-NQM4 (MSRM 2024-NQM4), a $338.9 million non-prime RMBS transaction. The underlying collateral, comprising of 842 residential mortgages, is characterized by a notable concentration of alternative income documentation (69.7%). The majority of the loans are either classified as non-qualified mortgages (Non-QM) (41.4%) or exempt (55.2%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA assigns a long-term rating of AA, with a Stable Outlook, to Harris County, Texas Hotel Occupancy Tax Senior Lien Revenue Bonds, Taxable Series 2024.

KBRA is pleased to announce the assignment of preliminary ratings to 35 classes of BANK5 2024-5YR12, an $876.0 million CMBS conduit transaction collateralized by 27 commercial mortgage loans secured by 153 properties.

KBRA has upgraded the rating on the Greater Orlando Aviation Authority Airport Facilities Revenue Bonds (Senior Lien) to AA+. The AA+ rating applies to the Airport Facilities Revenue Bonds, Series 2024 (AMT) and parity Senior Lien Bonds. The Authority's Priority Subordinated Airport Facilities Revenue Bonds, Series 2024 (AMT) are assigned a AA rating. The Outlook on both liens is Stable.

KBRA assigns preliminary ratings to two classes of notes issued by volofin Finance (Ireland) Designated Activity Company and volofin Finance US LLC (together, vFin 2024-1), an aviation loan ABS transaction. vFin 2024-1 represents the inaugural aviation loan ABS securitization sponsored and managed by volofin Capital Management Ltd. (volofin or the Company). The volofin platform, founded in 2019, offers financing solutions for aviation investment firms, aircraft lessors, and airlines and is managed by eight senior management members with an average industry experience of 23 years. Since inception, the Company has originated or acquired interest in 36 loan facilities and four EETC tranches with an aggregate commitment amount of over $1.6 billion, financing 199 aircraft and 108 engines on lease to 72 credit counterparties in 37 countries. The Company’s headquarters is in London with additional offices in New York, South Carolina, and Dublin.

KBRA releases a recap of Informa Connect’s 2024 SuperReturn conferences for Private Equity and Private Credit, held in New York on November 12-13. The conferences were well attended with close to 1,000 registrants, including over 450 general partners and 300 limited partners.

KBRA releases its 2025 CMBS Sector Outlook, which highlights our 2025 new issuance forecast, trends among the five major property types including demand and supply, and factors that may affect property performance next year. We also discuss year-to-date (YTD) KBRA-rated CMBS conduit trends and metrics, take a closer look at 2024 ratings activity, and provide our rating expectations for 2025.

KBRA releases its 2025 Structured Credit Sector Outlook, which discusses structured credit issuance and themes for transactions and leveraged loans in 2024, as well as tailwinds and headwinds for issuance and performance next year.

KBRA assigns preliminary ratings to nine classes of mortgage pass-through certificates from HOMES 2024-NQM2 Trust, the first to be rated by KBRA. The $374.6 million RMBS transaction is collateralized by a pool of 659 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 92.6% and 7.4% of the pool, respectively. The deal includes a meaningful concentration (90.1%) of collateral that KBRA considers to be “non-prime,” where most loans are either classified as Non-QM (48.8%) or exempt (47.8%). Acra Lending (37.2%) and Angel Oak (20.1%) were the two originators comprising over 10% of the pool.

KBRA assigns preliminary ratings to five classes of notes issued by Thoma Bravo Credit Asset Funding, ABS, LLC (“TBCAF 2023-1R”), a cash flow collateralized debt obligation backed by a diversified portfolio of a static portfolio of recurring revenue loans (“RRLs”, also known as “late-stage lending loans”) and middle market loans (“MMLs”).

KBRA assigns a rating of BBB- to BlackRock Private Credit Fund's (“BDEBT” or “the company”) $125 million senior unsecured notes due in 2027 and 2030. The notes comprise a $70 million, 7.14% tranche and a $55 million, 7.33% tranche with maturities of November 18, 2027, and January 22, 2030, respectively. The rating Outlook is Stable. The proceeds will be used for general corporate purposes.

KBRA assigns preliminary ratings to seven classes of notes issued by Hildene TRUPS Securitization 6, Ltd. (HITR6), a securitization backed by a portfolio of bank and insurance TruPs CDO assets.

KBRA assigns preliminary ratings to seven classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2024-12 (AOMT 2024-12), a $331.3 million non-prime RMBS transaction. The underlying collateral, comprised of 646 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. All the loans are either classified as non-qualified mortgages (59.5%) or exempt (40.5%) from the Ability-to-Repay/Qualified Mortgage rule due to being originated for non-consumer loan purposes. Together, Angel Oak Mortgage Solutions and Angel Oak Home Loans, both entities of Angel Oak, originated 28.8% of the pool. No other originator comprised over 15% of the collateral.

KBRA assigns preliminary ratings to seven classes of mortgage-backed notes from OBX 2024-NQM17 Trust, a $623.3 million non-prime RMBS transaction. The underlying collateral, comprising 1,136 residential mortgages, is characterized by a notable concentration of alternative income documentation (89.6%) loans. Most of the loans are classified as non-qualified mortgages (Non-QM) (55.3%) or exempt (41.0%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA releases its third-quarter 2024 U.S. Bank Compendium, providing the latest view of the U.S. banking industry and analysis of 3Q24 results for U.S. banks with KBRA long-term ratings.

KBRA releases its 2025 RMBS Sector Outlook, which provides market and performance themes as of year-to-date (YTD) 2024, as well as issuance volume trends and forecasts for 2025, collateral performance trends, and rating surveillance outcomes. In addition, we cover the RMBS 2.0 spread environment at pricing as well as other themes to watch in 2025.

KBRA assigns a long-term rating of AA to the Chicago Transit Authority, IL (CTA) Sales Tax Receipts Revenue Refunding Bonds Series 2024A. Concurrently, KBRA affirms the long-term rating of AA assigned to outstanding CTA Sales Tax Receipts Revenue Bonds and the long-term AA- rating assigned to outstanding Second Lien Sales Tax Receipts Revenue Bonds. The Outlook on all debt is Stable.

KBRA is proud to host an exclusive Bank Symposium on November 20, bringing together an elite group of policymakers, regulatory officials, bankers, and top debt investors at a critical moment in global politics. This full-day premier event will offer attendees a chance to engage in high-level discussions and garner insights into crucial topics affecting the financial industry, including the trajectory of bank regulation and credit risk and other emerging market trends.

KBRA assigns preliminary ratings to six classes of mortgage pass-through certificates from COLT 2024-INV4 Mortgage Loan Trust, a $217.7 million investor cash flow non-prime RMBS transaction. The underlying collateral comprises 601 mortgages that were underwritten using debt service coverage ratios (DSCRs). The loans in the COLT 2024-INV4 pool are primarily fixed rate (97.1% of the pool), exhibit a weighted average (WA) original credit score of 751, and have an original combined loan-to-value (CLTV) of 64.2%. The WA original DSCR is approximately 1.14x coverage.

KBRA assigns preliminary ratings to five classes of notes issued by Thoma Bravo Credit Asset Funding, ABS, LLC (“TBCAF 2023-1R”), a cash flow collateralized debt obligation backed by a diversified portfolio of a static portfolio of recurring revenue loans (“RRLs”, also known as “late-stage lending loans”) and middle market loans (“MMLs”).

KBRA assigns preliminary ratings to 59 classes of mortgage-backed notes from GCAT 2024-INV4 Trust. The GCAT 2024-INV4 mortgage loans are secured by first liens on non-owner occupied (NOO) investor properties and second homes. The loans were primarily underwritten to agency guidelines. The pool comprises 1,005, first-lien, fixed rate residential mortgage loans as of the cut-off date. The pool is characterized by moderate borrower equity in each mortgaged property, as evidenced by the WA original LTV and the WA original CLTV of 75.1%. The weighted average original credit score is 773, which is within the prime mortgage range.

Spirit Airlines Inc. (Spirit), an ultra-low-cost carrier headquartered in Dania Beach, Florida, has experienced financial deterioration in recent years as the airline has struggled to recover from the COVID-19 pandemic, with recent headlines indicating that Spirit is preparing to file for bankruptcy protection.

KBRA assigns a rating of BBB to FS KKR Capital Corp.'s (“FSK” or “the company”) $600 million, 6.125% senior unsecured notes due January 15, 2030. The rating Outlook is Stable. The proceeds will be used for general corporate purposes and for repayment of existing indebtedness.

KBRA assigns a preliminary rating to Wingstop Funding LLC (the Issuer), Series 2024-1 (Wingstop 2024-1). Wingstop 2024-1 represents the Issuer's fourth securitization following the establishment of the master trust in November 2018. In conjunction with the issuance of the Series 2024-1 Notes, KBRA anticipates affirming the ratings on the Issuer’s outstanding notes.

KBRA releases research analyzing multifamily distress across CMBS conduits and Freddie Mac (FM) securitizations. Multifamily properties are facing slower rent growth, heavy supply, and inflationary operating expenses pressures, as well as higher interest and capitalization rates. However, the performance of stabilized multifamily loans in securitized CMBS has varied across securitization program type and vintage. Among the fixed rate conduit product, the distress rate—which includes both delinquent loans and loans that are current but specially serviced—climbed to 4.46% as of the end of Q3 2024 while the FM fixed rate K-series product was at just 19 basis points (bps).

KBRA places the City's G.O. Bond rating on Watch Downgrade and assigns a long-term rating of "A" to the City of Chicago’s General Obligation Bonds, Refunding Series 2024B and Taxable Refunding Series 2024C. The Watch Downgrade reflects the mounting fiscal challenges confronting the City in light of a $982.4 million projected 2025 Corporate Fund budgetary shortfall. KBRA expects to resolve the Watch status by early January 2025, pending the outcome of budget deliberations by the Chicago City Council.

KBRA assigns preliminary ratings to three classes of notes issued by Santander Drive Auto Receivables Trust 2024-S3 ("SDART 2024-S3"), a re-securitization of a portion of the Class D notes (the "Underlying Class D Notes") and the entire certificate (the "Underlying Certificate") issued from the Santander Drive Auto Receivables Trust 2021-3 auto loan transaction ("SDART 2021-3" or the "Underlying Securitization Transaction").

KBRA assigns a rating of BBB+ to Blue Owl Capital Corporation's (NYSE: OBDC or "the company") $400 million, 5.95% senior unsecured notes due 2029. The Outlook for the rating is Stable. The company intends to use proceeds to pay down secured debt.

KBRA assigns a long-term rating of AA- with a Stable Outlook to the City of Chicago Second Lien Wastewater Transmission Revenue Bonds, Refunding Series 2024B. The long-term rating reflects the Wastewater System’s strong financial flexibility, historically stable operating performance, and the favorable characteristics of the large and diverse service area. Concurrently, KBRA affirms the long-term rating of AA- with a Stable Outlook on the City of Chicago's parity Second Lien Wastewater Transmission Revenue Bonds.