On May 2, 2022, KBRA assigned Barings Capital Investment Corporation (“BCIC” or “the Company”) issuer and senior unsecured debt ratings of BBB-. The outlook for ratings is stable.
Barings Capital Investment Corporation’s BBB issuer and senior unsecured debt ratings reflect the company’s $1.0 billion diversified investment portfolio, comprised of 172 portfolio companies across 25 industries, which primarily includes senior secured loans (81%), of which 73% are made up of senior secured loans. loans as of March 31, 2022. The company’s adviser, Barings LLC, is affiliated with MassMutual which was established in 1851 and had $895 billion of life insurance in force as of December 31, 2021. The ratings also take into account l firm’s access to $371 billion in diversified global assets under management, including $36 billion dedicated to private credit, and its modest leverage of 0.96x with a target range of 0.9x to 1.25x . The company enjoys joint SEC exemption to invest with Barings LLC’s other global fixed income platforms, including, as noted, $36 billion in private credit. Additionally, the company’s management team has decades of industry experience. These strengths are offset by the potential risk associated with BCIC’s activities as a regulated BDC, illiquid assets, a high level of secure funding sources (82.9%) and a short operating history of less than two years. In addition, the investment portfolio maintains a high level (30%) of investments considered “cross-platform” consisting of equities, ABLs, structured products and investments in joint ventures, which is higher than that peers and introduces increased earnings volatility.
Established in July 2020, BCIC is a non-diversified, private, unlisted business development company headquartered in Charlotte, North Carolina, regulated under the Investment Company Act of 1940 and registered as a as a regulated investment company for tax purposes. MassMutual retains a 17.9% stake in the company.
The ratings are based on KBRA’s Global Financial Company Rating Methodology published on November 28, 2017 and KBRA’s Global ESG Rating Methodology published on June 16, 2021.
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Further information on key credit considerations, sensitivity analyzes which look at factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a driver key to the change in credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially significant sources that were used to prepare the credit rating and information on the methodology(ies) (including all significant models and sensitivity analyzes of the main relevant rating assumptions, the where applicable) used to determine credit rating are available in the information disclosure form(s) located here.
Information on the meaning of each rating category can be found here.
Additional information relating to this rating metric is available in the information disclosure form(s) referenced above. Additional information regarding KBRA’s policies, methodologies, grading scales and disclosures is available at www.kbra.com.
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