New York, June 09, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 2 June 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for this review was Finance Companies Methodology published in November 2019. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Profitability: a finance company's long-term profitability is a core element of its ability to generate capital and support creditor obligations, and core or recurring profitability is the first line of defense to absorb credit-related losses and losses stemming from market, operational and business risk.
Capital Adequacy and Leverage: capital adequacy is a key element in the assessment of a finance company's ability to absorb asset volatility, including write-downs, or the impact of a systemic crisis that causes dislocation in financial markets. Ample capital enhances financial flexibility, which may support access to capital markets in times of stress. Finance companies with lower leverage have more strategic alternatives; they are better able to fund growth and acquisitions or to divest themselves of non-core businesses and absorb losses on discontinued operations.
Asset quality: asset quality is a primary driver of earnings and capital formation for some finance companies, including lenders and business development companies. These types of finance company often have a concentration in a single asset class or operate in niche sectors that are intrinsically higher risk (e.g., subprime) and that can be vulnerable to changing investor sentiment irrespective of expected asset quality performance. However, asset quality considerations are immaterial for those finance companies that are service providers and similar companies that have predominantly cash flow-based businesses; and accordingly, asset quality considerations typically are not a core component of the analysis for these.
Cash flow and liquidity: the ability of a finance company to access liquidity on a recurring basis is an essential component of its operating model. Most finance companies rely heavily on confidence-sensitive wholesale funding which increases liquidity risk in times of stress.
Operating environment: a finance company's operating environment can over time have as much, if not more, of a bearing on its long-term viability as the intrinsic strength of their own operations. Operating environment considerations include the relevant economic, judicial, regulatory, institutional, and general operating conditions that may affect finance companies' creditworthiness.
Other qualitative considerations: important other qualitative considerations that can affect a finance company's creditworthiness include the extent of its business diversification, concentration and franchise positioning, the extent of the opacity and complexity of its activities, its corporate behavior and risk management, and its liquidity management.
Support and structural analysis: a finance company's ratings may be positively affected by the capacity and willingness of its affiliates and public bodies to provide it with support.
Sovereign or parent constraint: a finance company's ratings may be negatively affected by a constraint related to the relatively lower creditworthiness of its sovereign or parent.
Instrument-level rating considerations: individual instrument ratings also factor in notching considerations based on the seniority and collateral of the instruments.
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
List of Issuers/Rated Entities
AerCap Holdings N.V.
Air Transport Services Group, Inc.
Aviation Capital Group LLC
Avolon Holdings Limited
Barings BDC, Inc.
Barings Private Credit Corp.
BlackRock TCP Capital Corp.
Blackstone Private Credit Fund
Blackstone Secured Lending Fund
Burford Capital Limited
Dubai Aerospace Enterprise (DAE) Ltd.
FS KKR Capital Corp
Prospect Capital Corporation
Starwood Property Trust, Inc.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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