NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns a BBB rating with a Stable Outlook to Business Development Corporation of America’s (“BDCA” or “the Company”) $100 million senior unsecured 4.85% notes due 2024 (“the Notes”). BDCA expects to use the proceeds to paydown a portion of its outstanding bank loans and for general corporate purposes. The Notes rank equally with existing and future senior unsecured notes issued by BDCA.
Incorporated in 2010, BDCA is a New York-based, externally managed, non-traded business development company (BDC) operating under the Investment Company Act of 1940. The Company was established to provide capital, primarily in the form of senior secured loans to middle market companies while providing investors a preservation of capital and attractive yields. BDCA is externally managed by BDCA Adviser, LLC (the “Adviser”), a subsidiary of Benefit Street Partners (BSP), a registered investment advisor with the SEC and an affiliate of Franklin Templeton (FT).
The BBB ratings reflect BDCA’s solid and well diversified $2.6 billion investment portfolio consisting mainly of senior secured debt (81.6%) to 232 portfolio companies across approximately 20 industry sectors, a sound external manager, BSP Advisor, a subsidiary of Franklin Templeton (FT), which has a sizeable fixed income asset management platform of $261 billion and a shrinking CLO portfolio that comprised 4.28% of total investments as of September 30, 2019. Further supporting the ratings are the company’s appropriate leverage at 0.77 times and ample unencumbered assets in excess of $1 billion as of September 30, 2019. The Company has not sought unitholder approval to increase its leverage as permissible under the SBCAA which was enacted in March 2018. These strengths are counterbalanced by the potential risks related to BDCA’s significant exposure to illiquid investments and limitations in accessing the equity markets.
The ratings are assigned using KBRA’s Global Finance Company Rating Methodology, published November 28, 2017.
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Teri Seelig, Director
(646) 731- 2386
Boris Alishayev, Director
Marjan Riggi, Senior Managing Director
Nish Kumar, Senior Director