KBRA assigns an issuer credit rating of BBB- to HG Global Ltd. and a long-term credit rating of BBB on the $150 million senior secured term loan. The outlook for both ratings is stable.
HG Global Ltd. (“HG Global”) is issuing a term loan (the “Loan”) in the aggregate principal amount of $150 million. The loan is expected to close on March 31, 2022, with funding no later than May 31, 2022.
The loan is secured by a first ranking equity interest in HG Global’s wholly owned subsidiary, HG Holdings Ltd. (“HG Holdings”), which in turn has access to (i) all accrued interest on Build America Mutual (“BAM”) excess notes that are held outside of the collateral trusts and (ii) all releases excess funds from guarantee trusts to its wholly-owned reinsurance subsidiary HG Re Ltd. (“HG Re”). The transaction requires the maintenance of an interest reserve account containing eight quarters of interest payments, which will serve as a liquidity buffer at HG Global to cover potential mismatches between free cash flow and the service of the debt on the loan.
Further information on key credit considerations, sensitivity analyzes that consider factors that may affect these credit ratings and how they could lead to an upgrade or downgrade, and ESG factors (where they are a key factor in changing the credit rating or rating outlook) can be viewed in the full rating report mentioned 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 the 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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