Articles from KBRA

In an 8-K filing on June 5, 2025, Sunnova Energy Corporation (Sunnova)—the sponsor and originator of 24 residential solar loan and lease transactions rated by KBRA1 —disclosed that its wholly-owned subsidiary, Sunnova TEP Developer, LLC (Sunnova TEP), had filed a voluntary petition for relief under Chapter 11 of U.S. Bankruptcy Code. Sunnova also reported that its Board approved a reduction in force, effective May 30, 2025, of approximately 718 employees or 55% of its workforce. Given these developments, it is plausible that additional Sunnova subsidiaries— and potentially Sunnova itself—may seek bankruptcy protection in the near future.

KBRA, a global full-service credit rating agency, is pleased to announce it was named winner in the Ratings Provider of the Year category at the Private Equity Wire U.S. Credit Awards 2024 ceremony held on September 12 in New York.

KBRA is pleased to announce three new senior appointments to its already deep bench of more than 70 analysts dedicated to funds and private credit-related ratings and research. These additions will further strengthen a team that has been at the forefront of rating and assessing thousands of middle market-related credits in a variety of growing subsectors including fund finance, subscription facilities, NAV facilities, feeder notes, CFOs, business development companies (BDC), private credit funds, middle market CLOs, and many thousands of their underlying corporate obligors.

KBRA releases topical and timely commentary on credit markets, compiled from our weekly podcast, 3 Things in Credit, hosted by our Chief Strategist, Van Hesser. Among the wide-ranging topics Van has addressed over the past month are a deeper dive into financial conditions, the Chicago Fed’s endorsement of private placements, and a shift in the relationship between corporate and asset-backed credit spreads.

KBRA assigns preliminary ratings to eight classes of mortgage pass-through certificates from CROSS 2024-H4 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 $318.7 million transaction is collateralized by a pool of 630 residential mortgages originated by CCM, including a meaningful concentration of collateral that KBRA considers to be “non-prime”, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 83.6% and 16.4% of the pool, respectively.

KBRA releases its Day 2 recap of the CRE Finance Council (CREFC) June Conference 2024.

KBRA releases a report examining the stability of KBRA’s ratings and how those ratings transitioned over 1-year, 3year, 5-year, and lifetime time horizons between 2011 and 2023. The ratings universe used in this study includes both published and unpublished long-term credit ratings (LTCR) assigned across all geographical regions, which are assigned to issuers, transactions, and securities using the same rating scale.

KBRA releases topical and timely commentary on credit markets, compiled from our weekly podcast, 3 Things in Credit, hosted by our Chief Strategist, Van Hesser. Among the wide-ranging topics Van has addressed over the past month are U.S. exceptionalism, historic tights in single-B credit spreads, and muted event risk.

KBRA publishes and affirms a BBB- rating to the Class A Senior Notes (“Class A Notes”) and a B+ rating to the Class B Subordinated Notes (“Class B Notes”, and together the “Notes”) issued by PineBridge Private Credit III RFF, L.P. (the “Issuer” or the “Borrower”). The ratings were originally assigned on September 21, 2022 and were affirmed on October 11, 2023 on an unpublished basis. The rating Outlook is Stable.

KBRA releases the latest episode of its podcast series, Leading Voices in Credit, where KBRA Chief Strategist Van Hesser interviews credit market thought leaders.

KBRA releases topical and timely commentary on credit markets, compiled from our weekly podcast, 3 Things in Credit, hosted by our Chief Strategist, Van Hesser. Among the wide-ranging topics Van has addressed over the past month are credit’s strong technicals, Powell’s rate cut dilemma, and private credit borrowers.

KBRA releases the February 2024 issue of CMBS Trend Watch.

KBRA releases a Tuesday recap of the SFVegas 2024 conference held on February 25-28.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the February 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in February decreased slightly from last month by 13 basis points (bps) to 4.48% after last January’s 10% increase. However, the total delinquent and specially serviced loan rate (distress rate) continued to rise, up 8 bps to 7.47%. This was led by mixed-use, which now has a distress rate close to 15%, and office which reached 11% this month.

KBRA releases research on commercial real estate (CRE) collateralized loan obligation (CLO) distress and loan modification rates. A review of CRE CLO loans originated prior to 2023 shows clear deterioration, with the distressed loan rate up nearly 4x from the end of 2022, to 5.4%. Meanwhile, the rate of loan modifications is up over 100% for the same period, to 16.7%. The distress rate, which is composed of loans that are either delinquent or specially serviced, was at a relatively low 1.4% at year-end (YE) 2022, while the percentage of loan modifications was 7.9% at that time. Multifamily, which represents about 70% of the aggregate outstanding loan balance, performed better, with a distress rate of 4.3% and modification rate of 12.7%. At the other end of the spectrum, office, which has the second-highest concentration at about 13.3% of the population, had a distress rate of 12.3% and a modification rate of 35.4%.

KBRA releases an updated report that tracks several reported metrics within recurring revenue loan (RRL) securitizations. The report is an update to our November analysis.

KBRA releases research that examines synthetic risk transfer (SRT) transactions. Dialogue with market participants regarding SRTs has increased ahead of upcoming Basel 3 regulations set to take effect in mid-2025.

KBRA releases topical and timely commentary on credit markets, compiled from our weekly podcast, 3 Things in Credit, hosted by our Chief Strategist, Van Hesser. Among the wide-ranging topics Van has addressed over the past month are what rising credit card delinquencies signal, the anatomy of a soft landing, and the significance of nonbanks’ growing share of lending.

KBRA releases the January 2024 issue of CMBS Trend Watch.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the January 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in January meaningfully climbed from December, rising almost 10% to 4.61%. The total delinquent and specially serviced loan rate (distress rate) also jumped more than 11% to 7.39%. Office experienced the most significant increase, climbing 233 basis points (bps) to 10.88%.

KBRA releases topical and timely commentary on credit markets, compiled from our weekly podcast, 3 Things in Credit, hosted by our Chief Strategist, Van Hesser. Among the wide-ranging topics Van has addressed over the past month are what’s behind the split in sentiment around recession probability and risk market prospects, geopolitical risks we should care about, and perspective on rising bad debt costs at banks.

KBRA assigns preliminary ratings to five classes of notes issued by Bridgecrest Lending Auto Securitization Trust 2024-1 (“BLAST 2024-1”), an asset-backed securitization collateralized by a pool of sub-prime auto loans.

KBRA releases its Day 3 recap of the CRE Finance Council (CREFC) January Conference 2024. The final day of the CREFC January conference was the Servicing Summit, which consisted of three panels covering topical issues in servicing, special servicing, and securitization workouts. The first panel discussed servicing issues among master and special servicers of CMBS transactions, while the second panel reviewed workout strategies of asset managers from a portfolio lender perspective. The last panel also covered workouts, which were discussed in the context of loans in CMBS transactions.

KBRA releases its Day 2 recap of the CRE Finance Council (CREFC) January Conference 2024. Day 2 of the conference opened with the Servicers and Special Situations Forum, with discussion of topics such as valuation uncertainty, special servicing advances, and reviews of distressed assets. This was followed by additional panels that included three more forums: alternative lenders and high-yield investors, B-piece buyers, and investment-grade bondholders.

KBRA assigns preliminary ratings to four classes of notes issued by MMAF Equipment Finance LLC 2024-A (MMAF 2024-A), an equipment ABS transaction.

KBRA releases its Day 1 recap of the CRE Finance Council (CREFC) January Conference 2024. The organization, which is celebrating its 30th anniversary, returned to Miami for its annual January conference. The event drew a sizable attendance of over 2,200, with many industry participants coming to South Beach to take advantage of the opportunity to meet and discuss the year ahead. Registrants heard the views from various commercial real estate (CRE) finance experts, who discussed the potential impact of interest rates on the U.S. economy in 2024, as well as its effect on CRE and CMBS.

KBRA releases research on the 2023 CMBS loan maturities. Nearly 94% of 2023 maturing CMBS loans paid off despite the negative headlines about the challenging commercial real estate (CRE) finance environment. The numbers appear less rosy by loan balance, with a 71.8% payoff rate, as larger loans were more likely to face refinancing challenges.

KBRA releases the December 2023 issue of the KBRA CMBS Loss Compendium, which provides loss estimates for all KBRA-rated conduit transactions. In this report and its accompanying spreadsheet, KBRA provides insight into loss estimates for 330 outstanding KBRA-rated conduit transactions, as well as lifetime realized losses for the six KBRA-rated conduit transactions that have no ratings outstanding because of deal payoffs.

KBRA releases the December 2023 issue of CMBS Trend Watch.

KBRA releases a report comparing the credit metrics between the 2023 5-year and 10-year conduit deals. In 2023, the commercial real estate (CRE) securitization market offered 5-year fixed rate loans to borrowers hesitant to lock in longer-term 10-year loans. This led to the market’s first CMBS conduit deal issuance that solely comprised 5-year loans. Ten transactions followed, bringing the total 5-year issuance to $8.8 billion, representing 44.7% of the year’s conduit issuance. Based on our current visibility, there are already two 5-year conduit deals queuing up for January, and we expect more will follow as the year unfolds.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the December 2023 servicer reporting period. The delinquency rate among KBRA-rated U.S. CMBS in December pulled back to 4.21%, fully offsetting November’s 19-basis point (bp) increase. The total delinquent and specially serviced loan rate (distress rate) also declined from November to 6.65%, a drop of 25 bps. The improved distress rate was broad based, with five of seven sectors experiencing declines. The exceptions were multifamily and industrial, which increased for a second straight month.

KBRA assigns preliminary ratings to three classes of notes issued by Momnt Technologies Trust 2023-1 (“Momnt 2023-1”), an asset-backed securitization collateralized by a pool of home improvement loans. This transaction represents Momnt Technologies Inc.’s inaugural 144A ABS securitization.

KBRA releases its Business Development Company Ratings Compendium, which looks at results for the quarter ended September 30, 2023, as well as provides our 2024 Sector Outlook. The report also examines the growing concerns in the private credit market as expectations for higher-for-longer base rates weigh on the credit quality of investment portfolios and the coming debt maturity wall in 2024 and 2025. The performance of KBRA-rated BDCs remains stable with solid credit metrics, including comfortable liquidity considering near-term maturities, low non-accruals, and appropriate leverage. KBRA’s Outlook for our portfolio of rated BDCs remains generally Stable, reflecting our view that they can successfully manage through a more uncertain environment in 2024.

KBRA releases the November 2023 issue of CMBS Trend Watch.

KBRA assigns preliminary ratings to six classes of mortgage pass-through notes from Verus Securitization Trust 2023-8 (VERUS 2023-8), a $526.9 million non-prime RMBS transaction. The underlying collateral, comprising 1,008 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 737 and exhibit moderate equity in each mortgaged property, with an original combined LTV (CLTV) ratio of 69.8%.

KBRA releases topical and timely commentary on credit markets, compiled from our weekly podcast, 3 Things in Credit, hosted by our Chief Strategist, Van Hesser. Among the wide-ranging topics Van has addressed over the past month are rates volatility, consumer dry powder, and the Additional Tier 1 (AT1) capital securities market.

KBRA releases an update to our earlier reports that track several reported metrics within recurring revenue loan (RRL) securitizations.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the November 2023 servicer reporting period. The delinquency rate among KBRA-rated U.S. CMBS in November climbed 19 basis points (bps) to 4.4%, up from October’s 4.21% rate. The total delinquent and specially serviced loan rate (distress rate) experienced a larger increase of 35 bps to 6.88% from October’s 6.53%. On a positive note, the retail and lodging sector distress rates declined month-over-month (MoM) for the sixth and fourth consecutive month, respectively. However, continued growth in the office distress rate eclipsed the improvement, as it increased 116 bps MoM to 8.84%.

KBRA is pleased to announce the assignment of preliminary ratings to 18 classes of BMO 2023-C7, a $739.3 million CMBS conduit transaction collateralized by 32 commercial mortgage loans secured by 85 properties.

KBRA releases its 2024 ABS Sector Outlook, examining key trends from 2023 and providing forecasts for the new year.

KBRA assigns preliminary ratings to two classes of notes issued by Santander Drive Auto Receivables Trust 2023-S1 (“SDART 2023-S1”), a re-securitization of the certificates from the Santander Drive Auto Receivables Trust 2020-4 auto loan ABS transaction (“SDART 2020-4” or the “Underlying Securitization Transaction”).

KBRA releases the November 2023 episode of its podcast series, Leading Voices in Credit, which showcases monthly interviews with credit market thought leaders hosted by KBRA Chief Strategist Van Hesser.

KBRA releases its 2024 RMBS Sector Outlook, which provides an update on key U.S. RMBS market and performance themes as of year-to-date (YTD) 2023, as well as issuance volume trends and forecasts for 2024, collateral performance trends, and rating surveillance outcomes. In addition, we cover the RMBS 2.0 spread environment at pricing, plus other themes to watch in 2024.

KBRA releases its 2024 CMBS Sector Outlook, which highlights key credit trends from 2023 and forecasts U.S. CMBS issuance activity for the new year. The report reviews the current lending environment and property fundamentals, as well as factors that may affect overall property performance in 2024. The report also discusses year-to-date (YTD) KBRA-rated CMBS conduit trends and metrics, takes a closer look at 2023 ratings activity, and outlines ratings surveillance expectations for 2024.

KBRA releases its third-quarter 2023 U.S. Bank Compendium and 2024 Outlook, providing the latest view of the U.S. banking industry and analysis of 3Q23 results for U.S. banks with KBRA long-term ratings.

KBRA releases its 2024 Structured Credit Sector Outlook, which discusses structured credit issuance and themes for transactions and leveraged loans in 2023, as well as tailwinds and headwinds for issuance and performance next year.

KBRA releases research on the property assessed clean energy (PACE) market, origination and issuance trends for PACE securities backed by residential (R-PACE) and commercial (C-PACE) properties, recent regulatory activity in the sector, and future expectations for the market.

KBRA assigns a BBB Insurance Financial Strength Rating (IFSR) to Orange Insurance Exchange. The Outlook for the rating is Stable.

KBRA assigns preliminary ratings to 62 classes from Connecticut Avenue Securities, Series 2023-R08 (CAS 2023-R08), a credit risk sharing transaction with a total note offering of $573,483,000. The pool is characterized by loans with original loan-to-value (LTV) ratios that are greater than 60% and less than or equal to 80%.

KBRA is pleased to announce the assignment of preliminary ratings to 15 classes of BBCMS 2023-5C23, a $721.3 million CMBS conduit transaction collateralized by 31 commercial mortgage loans secured by 33 properties.

KBRA assigns preliminary ratings to 24 classes of mortgage pass-through certificates from Morgan Stanley Residential Mortgage Loan Trust 2023-4 (MSRM 2023-4). MSRM 2023-4 comprises 359 residential mortgages with an aggregate principal balance of $310.6 million as of the November 1, 2023 cut-off date. The majority of the underlying collateral includes prime jumbo non-conforming loans, all of which have been designated as Qualified Mortgages (QM).

KBRA assigns preliminary ratings to 12 classes of mortgage-backed notes from RCKT Mortgage Trust 2023-CES3 (RCKT 2023-CES3), a $370.7 million RMBS transaction, as of the cut-off date, co-sponsored by Woodward Capital Management LLC and Blue River Mortgage II LLC, wholly owned affiliates of Rocket Mortgage, LLC and Angelo, Gordon & Co. L.P., respectively, and consists entirely of closed-end second lien mortgages (CES; 100.0%). The underlying pool was originated solely by Rocket Mortgage, LLC (Rocket). The collateral is characterized entirely by fully amortizing, fixed-rate mortgages (FRMs) with 10-year (4.8%) and 20-year (95.2%) terms.

KBRA releases the October 2023 issue of CMBS Trend Watch.

KBRA assigns ratings to eight classes of notes issued by SCF Equipment Leasing 2023-1 LLC and SCF Equipment Leasing Canada 2023-1 Limited Partnership (collectively SCF 2023-1), an equipment ABS transaction.

KBRA releases topical and timely commentary on credit markets, compiled from our weekly podcast, 3 Things in Credit, hosted by our Chief Strategist, Van Hesser. Among the wide-ranging topics Van has addressed over the past month are corporate earnings optimism, a path that challenges Goldilocks outlooks, and credit’s relative value appeal.

KBRA is pleased to announce the assignment of preliminary ratings to four classes of FREMF Series 2023-K753 mortgage pass-through certificates and three classes of Freddie-Mac structured pass-through certificates (SPCs), Series K-753. FREMF 2023-K753 is a $964.3 million CMBS multi-borrower transaction. Freddie Mac will guarantee six classes of certificates issued in the underlying Series 2023-K753 securitization and will deposit the guaranteed underlying certificates into a separate trust that will issue the SPCs.

KBRA assigns preliminary ratings to eight classes of notes issued by Pagaya AI Debt Trust 2023-7 (“PAID 2023-7”), a consumer loan ABS transaction. PAID 2023-7 has initial credit enhancement levels of 66.85% for the Class A notes to 7.90% for the Class E notes. Credit enhancement is comprised of overcollateralization, subordination of junior note classes, a cash reserve account, and excess spread.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the October 2023 servicer reporting period. The delinquency rate among KBRA-rated U.S. CMBS in October held steady at 4.21%, just four basis points (bps) lower than September’s 4.25% rate. The total delinquent and specially serviced loan rate (distress rate) experienced a larger decline of 22 bps to 6.53%. The drop was led by a decreased distress rate in the office and retail sectors, as the balance of distressed loans brought current or returned to the master servicer following modifications and/or extensions outpaced newly distressed loans.

KBRA assigns preliminary ratings to eight classes of mortgage pass-through certificates from CROSS 2023-H2 Mortgage Trust, a 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 $332.8 million transaction is collateralized by a pool of 656 residential mortgages originated by CCM, including a meaningful concentration of collateral that KBRA considers to be “non-prime”, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 77.0% and 23.0% of the pool, respectively.

KBRA releases research analyzing El Nino, a complex climate phenomenon that adds to rising global temperatures, as well as the potential financial, social, and physical implications it may bring about globally in its ongoing return. The report also explores the impacts of the 2015 El Nino cycle through a case study on the Southern Africa region.

KBRA releases a Day 2 recap of the ABS East 2023 conference held at the Fontainebleau in Miami on October 23-25.

KBRA releases a Day 1 recap of the ABS East 2023 conference held at the Fontainebleau in Miami on October 23-25.

KBRA announces the appointment of Gopal Narsimhamurthy as Global Head of Fund Ratings. This appointment follows the resignation of Pramit Sheth who, after more than 12 years of service, will be leaving to pursue other opportunities.

KBRA releases research on the challenges expected for the 2021-2022 vintage of commercial real estate collateralized loan obligations (CRE CLO).

KBRA releases research that provides an overview of the railcar sector, prospects for future issuance, and KBRA rating performance.

KBRA assigns preliminary ratings to 6 classes of mortgage-backed certificates from Morgan Stanley Residential Mortgage Loan Trust 2023-NQM1 (MSRM 2023-NQM1), a $342.0 million non-prime RMBS transaction. The underlying collateral, comprising 864 residential mortgages, is characterized by a notable concentration of alternative income documentation (90.0%). Most of the loans are either classified as non-qualified mortgages (Non-QM) (43.9%) or exempt (49.9%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA assigns preliminary ratings to three classes of notes issued by Harvest SBA Loan Trust 2023-1. Harvest Small Business Finance, LLC was formed as a California limited liability company in 2015 and originates, owns, sells, and services small business loans backed by owner-occupied, multi-purpose commercial real estate in accordance with the SBA 7(a) loan program.

KBRA releases an update to its research that maps the EPA’s Greenhouse Gas (GHG) score as well as annual metric tons of carbon dioxide (CO2) emissions to make/model/year information provided in auto loan asset-level disclosure for 300 securitized loan pools across 18 auto loan ABS issuers.

KBRA releases a research report examining exposure to China in its rated universe of aviation asset-backed securities (ABS) transactions. In August, the White House announced an executive order prohibiting certain investments in China in sensitive technologies that could threaten the national security of the U.S., such as semiconductors, microelectronics, and artificial intelligence. While the bans are focused on the technology sector, they are among the latest escalations of geopolitical issues between the U.S. and China, with the potential to expand to other industries should tensions mount. While we are hopeful this does not occur—and do not foresee such actions—it prompted us to assess China exposure across our rated universe of over 50 aviation ABS transactions.

KBRA is pleased to announce the assignment of preliminary ratings to 15 classes of BMO 2023-5C2, a $777.0 million CMBS conduit transaction collateralized by 35 commercial mortgage loans secured by 62 properties.

KBRA releases research examining trends across the structured credit landscape, including issuance, spreads, and macro risks. Middle market collateralized loan obligations (CLO) have a record issuance year in sight and are on pace to deliver nearly $23 billion in CLO paper for the full year―activity that would surpass the $22 billion high-water mark from 2021 (the pandemic rebound year). Meanwhile, broadly syndicated loan (BSL) CLOs are grappling with an arbitrage issue that resulted in a year-over-year issuance drop of around 33%. Funding costs for BSL CLO liabilites have risen disproportionate to spreads on leverage loans during the Federal Reserve’s 18-month hiking cycle, squeezing excess interest to their lowest levels in years.

KBRA assigns a preliminary rating to one series of notes issued by Willis Engine Structured Trust VII (WEST VII), an aviation ABS transaction. WEST VII represents the eighth aviation ABS transaction, and the fifth rated by KBRA, that is sponsored and serviced by Willis Lease Finance Corporation and its affiliates (Willis or the Company). The Company is comprised of over 300 individuals operating out of 11 offices with headquarters in Coconut Creek, Florida.

KBRA announced today the launch of a new podcast series, Leading Voices in Credit, which showcases monthly interviews with credit market thought leaders hosted by KBRA Chief Strategist Van Hesser.

KBRA releases research that highlights the environmental, social, and governance (ESG) regulatory initiatives of the four largest states: California, Texas, Florida, and New York as the political debate over ESG continues across the U.S. Almost every state in the country has introduced policies related to ESG investing—some supporting the use of ESG factors and others limiting their application in investment decisions as well as in state contracts. As of August 2023, 37 U.S. states were pursuing regulation to restrict ESG investing, while 19 states were enacting laws encouraging the use of ESG.

Following the October 7 attacks on Israel by the Palestinian group Hamas, the Israeli government formally declared war and has launched counterattacks on Gaza. KBRA expresses its sympathy for those impacted by the war and is hopeful relative peace can return to the region.