KBRA assigned issuer and senior unsecured debt ratings of BBB- to BlackRock TCP Capital. The rating outlook is stable.
The ratings are supported by TCPC’s ties to BlackRock’s $86 billion credit platform, of which $35 billion is principally dedicated to private middle market direct lending. Also supporting the ratings is the company’s diversified ~$2 billion investment portfolio at fair value (FV), comprised of 158 portfolio companies across 23+ sectors with a high percentage (80.6%) of senior secured first lien loans.
Given the stable outlook, an upgrade is not expected in the medium term. However, positive rating momentum could be achieved over time if the portfolio credit quality improves materially, leverage remains near the target range and senior secured loans remain a high proportion of the company’s total investments. A rating downgrade and/or outlook change to negative could be considered if management alters its stated company strategy by increasing focus on riskier investments coupled with higher leverage metrics. A prolonged downturn in the U.S. economy with negative impact on the company’s earnings performance, asset quality and leverage and/or a change in credit monitoring could also precipitate negative rating action.
