NEW YORK – KBRA has released a new research report analyzing collateralized fund obligations (CFOs), detailing their typical structures, credit protections, and performance trends.
Key Findings on CFO Market Growth and Structural Features
CFOs are structured financial vehicles backed by cash flows from diversified pools of private capital assets, including limited partner interests, co-investments, and secondary market fund positions. They are typically structured as special-purpose vehicles (SPVs) that issue multiple debt tranches alongside equity tranches, catering to fixed-income investors with varying risk-return preferences.
While CFOs have existed since the early 2000s, their issuance has surged in recent years:
- Between 2018 and 2024, KBRA rated 152 tranches across 67 CFOs, totaling $37.7 billion in issuance.
- This included $28.5 billion in rated debt, with the remainder consisting of equity or unrated debt.
Comprehensive Market and Credit Analysis
The report examines:
- Key credit protections embedded in CFO structures.
- Issuance volume trends and how market demand has evolved.
- Structural features and rating performance of KBRA-rated CFOs.
To access the full report, click here.
Recent KBRA Private Credit Publications
- Private Credit: NAVigating the PE Landscape—NAV Loans Still Perform
- Private Credit: Feeder Notes and Credit Facilities Remain Resilient
- Private Credit: Feeder Fund Rated Notes—Squaring the Circle
- Private Credit: 2025 Outlook
- Private Credit: FFA 2025 Global Fund Finance Symposium Recap
This research offers valuable insights into the growing CFO market, providing investors with a clearer understanding of risk, return, and structural resilience in private credit securitizations.
