KBRA Releases Research – NAVigating the Resilience of NAV Loans

NEW YORK, February 03, 2023--(BUSINESS WIRE)--KBRA releases research that examines the resilience of its ratings for net asset value (NAV) loans secured by private equity exposures.

The impact of rising interest rates, a potential recession, the frozen initial public offering (IPO) market, inflation, and weaker private company valuations will likely present more sustained challenges to private equity sponsors and lenders, which could increase the credit risk associated with NAV loans. However, KBRA-rated NAV loans are well insulated from the credit impact of these challenges. The performance of these rated exposures will be meaningfully protected through a combination of structural protections and disciplined liquidity and portfolio management.

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KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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