Articles from Kroll Bond Rating Agency, LLC

KBRA assigns preliminary ratings to ten classes of mortgage-backed notes from OBX 2025-NQM19 Trust, a $707.2 million non-prime RMBS transaction. The underlying collateral, comprising 1,333 residential mortgages, is characterized by fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 94.5% and 5.5% of the pool, respectively. A majority of the loans are either classified as non-qualified mortgages (Non-QM; 47.1%) or exempt (39.8%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes. There were no originators comprising over 10% of the pool.

KBRA announces the assignment of preliminary ratings to six classes of BRES 2025-ATCAP, a CMBS single-borrower securitization. The collateral for the transaction is a $380.0 million floating rate, interest-only mortgage loan. The loan is expected to have an initial two-year term with three, one-year extension options and require monthly interest-only payments. The loan will be secured by the borrower's fee simple interests in 30 industrial assets and one excess land parcel. In total, the portfolio contains 4.5 million sf and the properties are located across five states, which are Texas (57.0%), Oklahoma (17.0%), Colorado (15.5%), Florida (5.3%), and Missouri (5.2%). As of June 2025, the portfolio was 91.2% leased to over 190 unique tenants.

KBRA assigns preliminary ratings to 20 classes of mortgage-backed notes from RCKT Mortgage Trust 2025-CES10 (RCKT 2025-CES10).

KBRA assigns the ‘AAA’ rating and 'Stable' outlook to the additional Senior Notes (Series AAA) with an aggregate size of $60 million and Senior Notes (Series BBB) with an aggregate size of $40 million. Concurrently, KBRA affirms the ‘AAA’ rating to the outstanding Senior Notes and affirms the ‘A+’ ratings to the outstanding Mandatory Redeemable Preferred Stocks issued by Kayne Anderson Energy Infrastructure Fund, Inc. (the “Fund”).

KBRA assigns preliminary ratings to three classes of debt issued by ABPCI Direct Lending Fund ABS IV LP (R), ("ABPCI IV (R)") a securitization backed a portfolio of recurring revenue loans, middle market loans, and hybrid asset-backed loans.

KBRA assigns preliminary ratings to 72 classes of mortgage pass-through certificates from Sequoia Mortgage Trust 2025-11 (SEMT 2025-11), a $499.9 million prime RMBS transaction. The pool is comprised of 410 first-lien, fully amortizing fixed rate mortgages with 30-year, 29-year and 15-year maturity terms. The collateral is characterized by a weighted average (WA) original credit score of 777 and moderate borrower equity, with a WA original LTV of 72.5% and WA original CLTV of 72.5%.

KBRA releases its latest non-qualified mortgage (NQM) RMBS default study. In this report, we add new borrower- and loan-level variables and report results for these additions through August 30, 2025 (the latest available), to capture emerging trends in the non-prime RMBS market. These include: Self-Employment Status, Number of Borrowers, Number of Mortgaged Properties, Due Diligence Results, Lease-in-Place (LIP) Flag, and Prepayment Penalty Term (PPT). These enhancements are intended to improve visibility into borrower-level dynamics, risk layering, and post-origination performance in NQM RMBS.

KBRA assigns preliminary ratings to eight classes of mortgage-backed notes from Santander Mortgage Asset Receivable Trust 2025-CES1 (SAN 2025-CES1), a $289.3 million RMBS transaction, as of the cut-off date, sponsored by Santander Bank, N.A. and Canyon PS1-25 Holdings, LP. The pool consists entirely of newly originated closed-end second lien mortgages (CES; 100.0%). The underlying pool is seasoned less than three months on average and comprises 3,741 loans originated solely by PennyMac Loan Services, LLC (PennyMac). The collateral is characterized entirely by fully amortizing, fixed-rate mortgages (FRMs) with 10-year (0.4%), 15-year (0.6%), 20-year (78.5%), and 30-year (20.5%) terms.

KBRA assigns preliminary ratings to 13 classes of notes issued by Pagaya AI Debt Grantor Trust 2025-7 and Pagaya AI Debt Trust 2025-7 (collectively “PAID 2025-7”), an unsecured consumer loan ABS transaction. PAID 2025-7 has initial hard credit enhancement levels of 82.79% for the Class A-1 Notes to 1.36% for the Class F Notes. Credit enhancement is comprised of overcollateralization, subordination (except for the Class F Notes), a cash reserve account funded at closing, and excess spread.

KBRA releases research providing an overview of the self-storage sector, which may be at an inflection point.

KBRA releases research on performance and trends of the music asset-backed securities (ABS) sector.

KBRA releases research examining trends across the structured credit landscape. Structured credit and collateralized loan obligation (CLO) issuance volume has remained strong in 2025 despite a choppy macroeconomic environment. After a brief tariff-driven risk-off in the spring that stalled a handful of deals and pushed CLO spreads wider, primary activity reaccelerated throughout the summer on the back of robust demand and heavy reset/refi volumes. By Q3, U.S. broadly syndicated loan (BSL) CLO AAAs tested the mid-120-basis point (bp) range but hovered modestly wider as supply ebbed and flowed. While tariff headlines initially clouded full-year (FY) issuance expectations, global new issue CLO volume of $184 billion through month-end August suggests that a healthy pace has been maintained. Momentum also improved through the summer for private credit (PC) and middle market (MM) CLOs, led by sizable upsized resets and steady new prints from various direct lending platforms. Pricing remains at a premium to BSLs—consistent with the lack of secondary liquidity for MM loans—but has benefited from similar technical tailwinds such as increased demand from exchange-traded funds (ETF) and institutional investors.

KBRA assigns preliminary ratings to 68 classes of mortgage-backed notes from PMT Loan Trust 2025-CNF1 (PMTLT 2025-CNF1), a prime RMBS transaction sponsored by PennyMac Corp. (PennyMac), an indirect, wholly-owned subsidiary of PennyMac Mortgage Investment Trust (PMT). PMTLT 2025-CNF1 comprises 570 agency-eligible, conforming mortgage loans with an aggregate stated principal balance of approximately $291.7 million as of the October 1, 2025 cut-off date. The underlying collateral consists of fully amortizing, mostly 30-year fixed-rate mortgages originated under the general QM designation. The pool is characterized by a weighted average (WA) original loan-to-value (LTV) of 71.8%, a WA original combined LTV (CLTV) of 72.6% and a WA original credit score of 775.

KBRA releases research analyzing the small business lending (SBL) sector, which has emerged as a meaningful asset class within structured finance, driven by alternative capital sources, fintech innovation, and shifting borrower demand. Over the past decade, KBRA has rated more than $14 billion in small business ABS in the United States.

On September 19, 2025, the Bankruptcy Court issued an order to authorize Vervent, Inc. (“Vervent”) to assume the role of successor servicer. The order also permits Vervent to access and use funds held in the servicer’s collection accounts to cover servicing and transition costs and to transfer funds into new accounts it establishes for ongoing operations. Vervent may only use funds from these accounts with the prior written approval of Wilmington Trust, N.A. and certain other creditors. The order is expiring on October 17, 2025, and a hearing on the potential extension or termination will be held on October 15, 2025.

KBRA assigns preliminary ratings to eight classes of mortgage pass-through notes from GCAT 2025-NQM6 Trust, a $343.9 million non-prime RMBS transaction. The underlying collateral, comprising 647 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. Borrowers in the subject pool possess a non-zero WA original credit score of 739 and exhibit modest equity in each mortgaged property, with WA LTV and combined LTV (CLTV) ratios of 72.5% and 72.5%, respectively.

KBRA assigns preliminary ratings to 66 classes of mortgage pass-through certificates from Radian Mortgage Capital Trust 2025-J4 (RMCT 2025-J4), which is backed by prime mortgages with an aggregate principal balance of approximately $297.4 million as of the October 1, 2025 cut-off date. The pool comprises 303 first-lien, fixed rate residential mortgage loans. The weighted average original credit score is 775, which is in line with the prime mortgage credit score range. The underlying collateral consists of both prime jumbo (78.9%) and agency-eligible (21.1%) loans.

KBRA assigns preliminary ratings to eight classes of mortgage-backed certificates from Morgan Stanley Residential Mortgage Loan Trust 2025-NQM8 (MSRM 2025-NQM8). MSRM 2025-NQM8 is an RMBS transaction sponsored by Morgan Stanley Mortgage Capital Holdings LLC as seller/sponsor and includes a meaningful concentration of collateral that KBRA considers to be “non-prime.” The $396.3 million RMBS transaction is collateralized by a pool of 763 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 97.2% and 2.8% of the pool, respectively. Most loans are either classified as non-qualified mortgages (Non-QM) (33.0%) or exempt (52.4%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA assigns preliminary ratings to eight classes of notes issued by Chase Auto Owner Trust 2025-2 (“CHAOT 2025-2”), an auto loan ABS transaction. The transaction has initial hard credit enhancement levels ranging from 5.40% for the Class A notes to 0.75% for the Class D notes. Credit enhancement consists of overcollateralization, excess spread, subordination (except for the Class D notes) and a cash reserve account.

KBRA is pleased to announce the assignment of preliminary ratings to five classes of BX 2025-PURE3, a Canadian CMBS single-borrower securitization. The collateral for the transaction is a CAD 505.0 million floating rate, interest-only mortgage loan. The loan is expected to have an initial two-year term with three, one-year extension options and requires monthly payments. The loan will be secured by the borrowers’ fee simple interests in 37 industrial assets. In total, the portfolio contains 3.3 million sf and the properties are located across three provinces, which are Ontario (37.9%), British Columbia (34.5%), and Quebec (27.7%). As of September 2025, the portfolio was 90.5% leased to over 185 unique tenants.

KBRA releases research analyzing RMBS exposure to the U.S. government shutdown on October 1, 2025, which furloughed thousands of federal employees. Over 350,000 are based in the Washington-Arlington-Alexandria, DC-VA-MD-WV metropolitan statistical area (D.C. MSA), according to the St. Louis Fed, with totals higher when contractors are included.

KBRA assigns preliminary ratings to five classes of notes issued by Octane Receivables Trust 2025-1 (“OCTL 2025-1”), a powersports equipment loan ABS transaction.

KBRA assigns a long-term rating of AA- to the Canutillo Independent School District (the District), Texas, Unlimited Tax Refunding Bonds, Series 2025 (the Bonds). Concurrently, KBRA affirms the AA- rating on the District's outstanding debt. The Outlook is Stable.

KBRA assigns a long-term rating of AAA with a Stable Outlook to the County of Henrico, VA Water and Sewer Revenue Bonds, Series 2025D.

KBRA assigns preliminary ratings to 72 classes of mortgage-backed notes from PMT Loan Trust 2025-INV10 (PMTLT 2025-INV10), a prime RMBS transaction sponsored by PennyMac Corp. (PennyMac), an indirect, wholly-owned subsidiary of PennyMac Mortgage Investment Trust (PMT). PMTLT 2025-INV10 comprises 1,014 fixed-rate mortgages (FRMs) with an aggregate principal balance of $387.3 million as of the October 1, 2025 cut-off date. The underlying pool consists of agency-eligible loans that are collateralized by investment properties (76.9%) and second homes (23.1%). The pool is characterized by significant borrower equity in each mortgaged property, as evidenced by the WA original LTV of 74.4%. The weighted average original credit score is 776, which is well within the prime mortgage range.

KBRA assigns a long-term rating of AAA with a Stable Outlook to the City of Winchester, VA General Obligation Public Improvement Bonds, Series 2025.

KBRA releases research examining how private credit’s exposure to First Brands Group LLC is minimal. Our analysis also indicates that none of the company’s nearly $6 billion in broadly syndicated loans (BSL) were originated by any private credit direct lending platforms.

Spirit Airlines Inc. (Spirit), an ultra-low-cost carrier headquartered in Dania Beach, Florida, has filed for Chapter 11 bankruptcy twice in the past year amid ongoing challenges from weak demand, high operating costs, and liquidity constraints. The airline first entered bankruptcy in November 2024 and exited in March 2025, but filed again in August 2025 to pursue a deeper restructuring.

KBRA assigns a long-term rating of BBB- to the Unlimited Tax General Obligation Refunding Bonds (Dedicated Revenues), Series 2025B and Unlimited Tax General Obligation Refunding Bonds (Dedicated Revenues), Series 2025C of the Board of Education of the City of Chicago, IL (Chicago Public Schools, or CPS).

KBRA assigns preliminary ratings to Cajun Global LLC (the Master Issuer) Series 2025-2 (Cajun 2025-2). Cajun 2025-2 represents the Master Issuer’s fifth securitization following the establishment of the master trust in 2011. In conjunction with the issuance of the Series 2025-2 Notes, KBRA anticipates affirming the ratings on the Securitization Entity’s outstanding Series 2025-1 Class A notes and withdrawal of Series 2021-1 Class A-1 LR, Class A-1 VFN, and Class A-2 notes.

KBRA assigns preliminary ratings to Castlelake Aircraft Structured Trust 2025-3 (CLAS 2025-3), an aviation ABS transaction. CLAS 2025-3 represents the 15th securitization sponsored by Castlelake, L.P. (the Company). The Company has a team of approximately 70 individuals focused on aviation finance and assets with headquarters in Minneapolis, Minnesota. Since inception, the Company has invested more than $22 billion in aviation assets and currently has more than 350 owned and managed assets.

KBRA releases its quarterly report highlighting our Chief Strategist Van Hesser’s view on key economic indicators, as well as what he identifies as the most influential factors driving credit markets in the upcoming quarter. The report also examines credit market valuations in the context of current and future market conditions.

KBRA affirms the senior unsecured debt rating of BBB, the subordinated debt rating of BBB-, and the short-term debt rating of K3 for Canfield, Ohio-based Farmers National Banc Corp. (NASDAQ: FMNB) ("Farmers" or “the company”). In addition, KBRA affirms the deposit and senior unsecured debt ratings of BBB+, the subordinated debt rating of BBB, and the short-term deposit and debt ratings of K2 for its subsidiary, The Farmers National Bank of Canfield. The Outlook for all long-term ratings is Stable.

KBRA assigns a long-term rating of A+ with a Stable Outlook to the City of Pensacola, FL Airport Revenue Bonds, Series 2025 (AMT).

KBRA affirms the long-term rating of A+ for the State of New Jersey's General Obligation Bonds and revises the rating outlook to Positive, from Stable, for the State's General Obligation Bonds and related State Appropriation bonds.

KBRA is pleased to announce the assignment of preliminary ratings to 14 classes of Benchmark 2025-V18, a $1.3 billion CMBS conduit transaction collateralized by 47 commercial mortgage loans secured by 92 properties. The collateral properties are located throughout 28 MSAs, of which the three largest are New York (20.1% of pool balance), Washington - NoVA - MD (8.7%), and North - Central New Jersey (7.1%). The pool has exposure to all major property types, with four types representing more than 10.0% of the pool balance: multifamily (34.6%), office (24.9%), lodging (16.1%) and mixed-use (11.4%). The loans have in-trust principal balances ranging from $4.1 million to $80.0 million for the largest loan in the pool, 9911 Belward (6.1%), a 289,912 sf, built-to-suit lab/R&D office building located in Rockville, Maryland, approximately 15 miles northwest of Washington DC. The five largest loans, which also include Park Place Village (4.7%), 180 Water (4.6%), City Center at Oyster Point (4.4%), and 1515 West Webster (4.3%), represent 24.0% of the initial pool balance, while the top 10 loans represent 44.0%.

KBRA assigns a rating of BBB- to BlackRock Private Credit Fund's ("BDEBT" or "the company") $50 million, 5.78% senior unsecured notes due December 17, 2028 and its $150 million, 6.14% senior unsecured notes due October 8, 2030. The rating Outlook is Stable. Funds will be used for general corporate purposes.

KBRA assigns preliminary ratings to 8 classes of mortgage-backed notes from New Residential Mortgage Loan Trust 2025-NQM5 (NRMLT 2025-NQM5), a $500.9 million non-prime RMBS transaction sponsored by Rithm Capital Corp. (formerly New Residential Investment Corp.), a publicly traded (NYSE: RITM) real estate investment trust (REIT). The underlying mortgages in the subject pool were primarily originated by Champions Funding, LLC (31.9%), NewRez LLC (24.8%), and Home Express Mortgage Corp. (15.3%). In addition, all loans will be serviced by Shellpoint Mortgage Servicing, a brand of NewRez LLC.

KBRA assigns preliminary ratings to Series 2025-2 (Uniti 2025-2, or the Series 2025-2 Notes) from Uniti Fiber ABS Issuer LLC (the Lead Issuer) and Uniti Fiber TRS Issuer LLC (the Co-Issuer), a communications infrastructure securitization (CIS) that is primarily collateralized by fiber network assets and related contracts.

KBRA releases the September 2025 issue of CMBS Trend Watch.

KBRA assigns a long-term rating of AA+ with a Stable Outlook to the City of New York (the City) General Obligation Bonds, Fiscal 2026 Series D and Fiscal 2026 Series E. The Fiscal 2026 Series D Bonds are tax-exempt. The Fiscal 2026 Series E Bonds consist of Taxable Bonds, Subseries E-1 and Taxable Social Bonds, Subseries E-2. Proceeds of the Series D Bonds and the Subseries E-1 Bonds will be used for capital purposes. Proceeds of the Subseries E-2 Bonds will reimburse prior City spending on certain affordable housing projects that qualify as Eligible Social Investments.

KBRA announces the assignment of preliminary ratings to seven classes of PRM7 2025-PRM7, a CMBS single-borrower securitization. The collateral for the transaction is a $505.0 million fixed rate, interest-only mortgage loan. There is existing subordinate debt in the form of a $70.0 million mezzanine loan held outside the trust. Future additional debt is not permitted. The fixed rate loan is expected to have an five-year term and requires monthly interest-only payments. The loan will be secured by the borrowers’ fee simple interests in 31 self-storage assets and two mixed-use asset encompassing 3.9 million sf located across 14 states and the U.S. Virgin Islands, the five largest of which are Massachusetts (28.2% of loan balance), North Carolina (16.8%), Florida (8.4%), U.S. Virgin Islands (6.7%), and New York (5.9%). As of August 2025, the portfolio's self-storage component was 85.9% leased, and the total portfolio occupancy was 80.5% leased.

KBRA assigns a long-term rating of A+ with a Stable Outlook to the Pennsylvania Turnpike Commission Turnpike Subordinate Revenue Refunding Bonds, First Series 2025.

KBRA assigns a preliminary rating of "BBB-" with Stable Outlook to Senior Unsecured Notes ("Notes") to be issued by Obsidian Insurance Holdings, Inc. (OIH) (KBRA Issuer Rating: BBB-/Stable). The intended use of proceeds include retiring existing senior unsecured notes due 2025, supporting future premium growth and general corporate purposes.

KBRA assigns preliminary ratings to 38 classes of mortgage pass-through certificates from Provident Funding Mortgage Trust 2025-5 (PFMT 2025-5).

KBRA assigns preliminary ratings to five classes of notes issued by American Credit Acceptance Receivables Trust 2025-4 (“ACAR 2025-4”), an ABS transaction collateralized by a pool of auto loans.

KBRA assigns preliminary ratings to eight classes of mortgage-backed certificates from Angel Oak Mortgage Trust 2025-10 (AOMT 2025-10), a $281.2 million non-prime RMBS transaction. The underlying collateral, comprised of 608 residential mortgages, is characterized by a significant concentration of loans underwritten using alternative income documentation. All the loans are either classified as exempt (54.1%) from the Ability-to-Repay/Qualified Mortgage rule due to being originated for non-consumer loan purposes or non-qualified mortgages (45.9%). Emporium TPO and Angel Oak Mortgage Solutions originated 23.3% and 10.9% of the pool respectively, with no other originator comprising over 10% of the collateral.

KBRA releases its latest 12 Things in Credit report, highlighting timely credit market themes drawn from our weekly podcast, 3 Things in Credit, hosted by KBRA’s Chief Strategist, Van Hesser. Among the wide-ranging topics Van discusses in this issue are risk concentrations worth considering, a deeper dive into the retail sales report, and economic lines of defense against slowdown.

KBRA assigns preliminary ratings to two classes of notes from DB Master Finance LLC, Series 2025-1. KBRA is assigning preliminary ratings to the Series 2025-1 Class A-2-I and Class A-2-II Notes and anticipates affirming each of the outstanding ratings on the Series 2021-1, and 2023-1 Class A-1 Notes issued by DB Master Finance LLC (the Master Issuer), a whole business securitization (WBS). The rating actions follow KBRA’s analysis which indicates that existing credit enhancement for the notes and cash flows are sufficient to support the ratings following the issuance of the Series 2025- 1 Class A-2-I and A-2-II Notes.

KBRA assigns preliminary ratings to five classes of notes issued by Barings Equipment Finance 2025-B (Barings 2025-B), an equipment ABS transaction.

KBRA assigns a preliminary rating to one class of notes issued by Sabal Issuer 2025-2, LLC. The transaction is collateralized by a diversified pool of 22,188 leases and power purchase agreements (PPAs) associated with residential solar photovoltaic installations (PV Systems), some of which have energy storage equipment. The total aggregate discounted solar asset balance (ADSAB) based on a discount rate of 7.5%, consisting of the discounted payments of the leases and PPAs is approximately $588.5 million. The securitization share of the ADSAB is approximately $518.6 million.

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the September 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS decreased to 7.7% in September from 7.9% in August. However, the total delinquent plus current but specially serviced loan rate (collectively, the distress rate) remained stable at 10.7%. The office delinquency rate decreased 90 basis points (bps) this month to 12.3%. Most of the office loans that became current this month remain with the special servicer, which is why the office distress rate did not fall. Among KBRA-rated loans, 1211 Avenue of the Americas ($1 billion in AOTA 2015-1211) became a performing matured balloon after a three-year modification and extension was closed last month.

KBRA releases research that examines the use of synthetic risk transfer (SRT) transactions referencing a variety of collateral types tied to corporate debt. The use of private credit corporate SRTs in the U.S. is expected to increase as banks seek to optimize regulatory capital pursuant to Federal Reserve guidance from 2023 and the implementation of Basel 3 Endgame. This KBRA report discusses market growth, alignment of interests, and various structural features.

KBRA assigns preliminary ratings to 70 classes of mortgage pass-through certificates from Sequoia Mortgage Trust 2025-10 (SEMT 2025-10), a $684.6 million prime RMBS transaction. The pool is comprised of 606 first-lien, fully amortizing fixed rate mortgages with 20-year and 30-year maturity terms. The collateral is characterized by a weighted average (WA) original credit score of 778 and moderate borrower equity, with a WA original LTV of 72.6% and WA original CLTV of 72.6%.

KBRA is pleased to announce the assignment of preliminary ratings to 14 classes of WFCM 2025-C65, a $688.9 million CMBS conduit transaction collateralized by 23 commercial mortgage loans secured by 85 properties. The collateral properties are located throughout 38 MSAs, of which the three largest are New York (19.6% of pool balance), Orange County (8.7%), and Boston (8.3%). The pool has exposure to all major property types, with four types representing more than 10.0% of the pool balance: retail (42.2%), office (19.7%), mixed-use (12.3%), and lodging (12.2%). The loans have in-trust principal balances ranging from $3.3 million to $65.0 million for the largest loan in the pool, 512 West 22nd Street (9.4%), a 172,576 sf, Class-A, LEED Silver certified office building located in the Chelsea neighborhood of New York City’s borough of Manhattan. The five largest loans, which also include Market Place Center (8.7%), 4 Union Square South (8.7%), BioMed MIT Portfolio (8.3%) and Coastal Equities Portfolio (8.0%), represent 43.2% of the initial pool balance, while the top 10 loans represent 73.2%.

KBRA assigns preliminary ratings to 12 classes of mortgage pass-through notes from Verus Securitization Trust 2025-9 (VERUS 2025-9), a $664.6 million non-prime RMBS transaction. The underlying collateral comprises 1,268 residential mortgages and is characterized by a significant concentration of loans underwritten using alternative income documentation. Borrowers in the subject pool possess a non-zero WA original credit score of 736 and exhibit moderate equity in each mortgaged property, with an original combined LTV (CLTV) ratio of 71.2%. Approximately 49.7% of the loans were exempt from the ATR/QM rule due to being originated for business purposes or underwritten by a CDFI. The remaining portions of the pool were categorized as non-qualified mortgages (Non-QM) under the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule (27.7%), QM: Safe Harbor (20.3%), or categorized as QM: Rebuttable Presumption (2.4%).

KBRA is pleased to announce the assignment of preliminary ratings to three classes of FREMF Series 2025-K172 mortgage pass-through certificates and three classes of Freddie-Mac structured pass-through certificates (SPCs), Series K-172. FREMF 2025-K172 is a $1.2 billion CMBS multi-borrower transaction. Freddie Mac will guarantee five classes of certificates issued in the underlying Series 2025-K172 securitization and will deposit the guaranteed underlying certificates into a separate trust that will issue the SPCs.

KBRA releases research noting that, without a solution to some of the industrywide setbacks, health care practice roll-ups—with their $45 billion in total debt—could be an outsized contributor to the higher direct lending default rate we anticipated this year (see Private Credit: 2025 Outlook). Health care roll-up platforms have long attracted investors eager to capitalize on the noncyclical nature of health care and the aging population in the U.S.; however, a combination of factors has recently exposed the fragility of the model.

KBRA assigns preliminary ratings to 5 classes of mortgage-backed certificates from Morgan Stanley Residential Mortgage Loan Trust 2025-SPL1 (MSRM 2025-SPL1). MSRM 2025-SPL1 is a seasoned RMBS transaction sponsored by Morgan Stanley Mortgage Capital Holdings LLC as seller/sponsor and includes a meaningful concentration of collateral that KBRA considers to be “non-prime.” The $419 million RMBS transaction is collateralized by a pool of 1,158 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 80.6% and 19.4% of the pool, respectively. Most loans are either classified as non-qualified mortgages (Non-QM) (15.9%) or exempt (84.1%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes.

KBRA assigns a rating of BBB to Franklin BSP Capital Corp's ("FBCC" or "the company") $300 million, 6.00% senior unsecured notes due 2030. The rating Outlook is Stable. The proceeds will be used to repay existing indebtedness.

KBRA assigns a long-term rating of A to the City of Chicago, Illinois (the City) Chicago Midway International Airport (Midway or the Airport) Senior Lien Revenue and Revenue Refunding Bonds Series 2025A (AMT) and Series 2025B (Non-AMT). KBRA concurrently affirms the long-term A rating on the City's outstanding parity Senior Lien Revenue Bonds issued for Midway. The Outlook is Stable.

KBRA assigns preliminary ratings to 76 classes of mortgage pass-through notes from OBX 2025-J3 Trust, a $359.4 million prime RMBS transaction. The underlying collateral, comprising 302 fixed-rate, fully amortizing loans is characterized by moderate borrower equity, as evidenced by the WA original LTV of 73.8%, and has a WA original credit score of 786.

KBRA announces the assignment of preliminary ratings to six classes of BX 2025-OMG, a CMBS single-borrower securitization. The collateral for the transaction will be a $435.0 million floating rate, interest-only mortgage loan. The loan is expected to have an initial two-year term with three, one-year extension options and require monthly interest-only payments. There is also expected to be $30.0 million of mezzanine debt in place. The loan is secured by the borrower’s fee simple interests in five multifamily properties totaling 1,717 units across three states. The properties are located in Massachusetts (56.1% of allocated loan amount), Florida (35.4%), and Georgia (8.5%), and were acquired by the sponsor between 2020 and 2021. As of September 2025, the portfolio was 92.4% occupied.

KBRA assigns a long-term rating of K1+ to the San Diego Unified School District (San Diego County, California): 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2008, Series P-1) (Federally Taxable); 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2018, Series I-1) (Federally Taxable); and, 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2022, Series C-1) (Federally Taxable). KBRA additionally assigns a long-term rating of AAA to the District's: 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2008, Series P-2); 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2018, Series I-2); 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2018, Series I-3); 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2022, Series C-2); and, 2025 General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) (Election of 2022, Series C-3). KBRA also affirms the long-term rating of AAA for the District's outstanding General Obligation Bonds. The rating Outlook is Stable.

KBRA affirms its insurance financial strength ratings (IFSR) of BBB+ for Nassau Life Insurance Company (NNY), Nassau Life and Annuity Company (NLA), Nassau Life Insurance Company of Kansas (NKS), and Nassau Re (Cayman) Ltd. (NKY). At the same time, KBRA affirms the BB+ issuer rating for Nassau Financial Group, L.P. (NFG) and the B+ long-term credit rating on NFG’s $100 million of Class C non-voting redeemable perpetual preferred units. KBRA has also assigned a BB+ rating to the recently issued $425 million 7.875% senior notes due 2030 of The Nassau Companies of New York (NCNY), which are fully and unconditionally guaranteed by NFG. The Outlook for all ratings is Positive.

KBRA assigns preliminary ratings to the Class A Notes, Class B Notes, Class C Notes, and Class D Notes issued by APL Finance 2023-1 Designated Activity Company and APL Finance 2023-1 LLC (together, APL Finance 2025-1), an aviation loan ABS transaction. APL Finance 2025-1 represents the second aviation loan ABS securitization serviced by Ashland Place Finance LLC (APL, the Company or the Servicer). The Company is owned by Davidson Kempner Capital Management LP (DKCM), and, together with DKCM, is comprised of over 500 individuals operating out of seven offices with headquarters in New York City. Affiliates of APL and DKCM will retain 100% of the equity of the subject transaction at closing.

KBRA assigns preliminary ratings to 56 classes of mortgage pass-through certificates from Citigroup Mortgage Loan Trust 2025-4 (CMLTI 2025-4), a prime residential mortgage-backed securities transaction collateralized by owner occupied primary and secondary properties. The underlying pool consists of 370 fixed-rate mortgages (FRMs) with an aggregate principal balance of approximately $345.5 million as of the cut-off date on September 1, 2025 and includes both non-agency (47.5%) and agency-eligible (52.5%) loans. 40.4% of the loans were originated by United Wholesale Mortgage, LLC and 73.7% of the loans will be serviced by Fay Servicing, LLC.

KBRA announces the assignment of preliminary ratings to seven classes of ESA 2025-ESH, a CMBS single-borrower securitization.

KBRA is pleased to announce the assignment of preliminary ratings to eight classes of Greystone 2025-HC4, a managed CRE CLO securitization with the ability to reinvest principal proceeds for 36 months including a 60-day ramp-up period to acquire one pre-identified delayed closed asset.

KBRA assigns preliminary ratings to 6 classes of mortgage-backed notes from GS Mortgage-Backed Securities Trust 2025-CES2 (GSMBS 2025-CES2), a $296.5 million RMBS transaction sponsored by Goldman Sachs Mortgage Company, entirely of closed-end second lien mortgages (CES; 100.0%). The underlying pool is seasoned approximately 12 months and comprises 4,157 loans, with AmeriSave Mortgage Corporation (34.4%) as the largest contributing originator. The collateral is characterized mostly by fully amortizing, fixed-rate mortgages (FRMs) with 10-year (4.9%), 20-year (61.3%) and 30-year (33.7%) terms.

KBRA announces the assignment of preliminary ratings to six classes of VTR 2025-STEM, a CMBS single-borrower securitization.

KBRA assigns a long-term rating of AA to the Wayne County Airport Authority, MI: Airport Revenue Refunding Bonds (Detroit Metropolitan Wayne County Airport), Series 2025D; Airport Revenue Refunding Bonds (Detroit Metropolitan Wayne County Airport), Series 2025E; Airport Revenue Refunding Bonds (Detroit Metropolitan Wayne County Airport), Series 2025F; Airport Revenue Refunding Bonds (Detroit Metropolitan Wayne County Airport), Series 2025G; and Airport Revenue Refunding Bonds (Detroit Metropolitan Wayne County Airport), Series 2025H. KBRA additionally affirms the long-term rating of AA for the Authority's outstanding Airport Revenue Bonds. The rating Outlook is Stable.

KBRA assigns preliminary ratings to two classes of notes issued by TIP Solar ABS 2025 Issuer LLC. The transaction is collateralized by a diversified pool of 7,765 leases and power purchase agreements (PPAs) associated with residential solar photovoltaic installations (PV Systems). The total Aggregate Discounted Solar Asset Balance (ADSAB) based on a discount rate of 7.5%, consisting of the discounted payments of the leases and PPAs is approximately $236.0 million.

KBRA assigns preliminary ratings to seven classes of notes issued by Research-Driven Pagaya Motor Asset Trust 2025-5 and Research-Driven Pagaya Motor Trust 2025-5 (collectively “RPM 2025-5”), an auto loan ABS transaction. RPM 2025-5 has initial credit enhancement levels of 91.90% for the Class A-1 notes to 9.41% for the Class E notes. Credit enhancement is comprised of overcollateralization, subordination of junior note classes (except for the Class E notes), a cash reserve account funded at closing, and excess spread.

KBRA assigns preliminary ratings to ten classes of mortgage-backed notes from OBX 2025-NQM18 Trust, a $743.2 million non-prime RMBS transaction. The underlying collateral, comprising 1,291 residential mortgages, is characterized by fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 91.2% and 8.8% of the pool, respectively. A majority of the loans are either classified as non-qualified mortgages (Non-QM; 53.4%) or exempt (41.7%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being originated for non-consumer loan purposes. There were no originators comprising over 10% of the pool.