KBRA assigns preliminary ratings to eight classes of notes issued by JCP Direct Lending CLO 2023-1 Ltd (JCP 2023-1), a collateralized loan obligation backed by a portfolio of middle market corporate loans.

JCP Direct Lending CLO 2023-1 Ltd is a $350.0 million delayed-draw middle market cash flow collateralized loan obligation (CLO) managed by Jefferies Credit Partners LLC (“JCP” or the “manager”). The rated Notes are partially unfunded at closing and can be drawn upon during the commitment period to purchase or originate assets. The capital structure is expected to be approximately 52% funded at the initial closing date, and fully funded within 12 months thereafter. The notes will be funded pro rata across all classes, maintaining credit enhancement through time.

The transaction has a four-year reinvestment period, and the legal final maturity is on July, 20, 2036. The ratings reflect initial credit enhancement levels, excess spread, and coverage tests including overcollateralization ratio and interest coverage tests.

Jefferies Credit Partners LLC, (“JCP”) is the named Investment Manager for the transaction. JCP is an alternative asset manager with over $14 billion in proprietary and third-party assets under management (AUM). The direct lending platform has invested approximately $25 billion in more than 1,500 companies.

Kroll Bond Rating Agency’s (KBRA) rating on the Class A-1A, A-1D, A-2D, A-2F, and B Notes considers the timely payment of interest and ultimate payment of principal by the applicable stated maturity date. KBRA’s ratings on the Class C, D-1, and D-F Notes consider ultimate interest and principal by the applicable stated maturity date.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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