KBRA releases an updated report tracking key metrics within the recurring revenue loan (RRL) securitization portfolio.

KBRA continues to track and present several key metrics in a dashboard format, sourced from quarterly collateral loan tapes provided by 23 KBRA-rated RRL asset-backed securities (ABS) transactions. This update incorporates collateral tapes dated as of March 2026, which include 102 unique obligors.

Weighted-Average Portfolio Key Statistics

• On an aggregate portfolio basis, annual recurring revenue (ARR) for the dashboard population is $177.6 million, down 0.9% quarter-over-quarter (QoQ) and 0.7% year-over-year (YoY), but remains above the historical average of $175.1 million.
• The debt-to-ARR ratio increased 2.5% QoQ to 1.7x but is down 5.1% YoY. The average loan-to-value ratio decreased 11 basis points (bps) QoQ but increased 260 bps YoY to 29.7%.
• Balance sheet cash decreased to $33.2 million, down 10.2% QoQ and 17.4% YoY, and remains below the historical average of $47.9 million. The decline in cash can be attributed to new RRL ABS transactions added to the dashboard that have relatively smaller companies in their portfolios and the removal of five sizable obligors that carried higher cash balances due to four loans’ recent conversion to EBITDA-based covenants and one repayment.
• Liquidity cushion decreased 13.8% QoQ and 11.6% YoY to $50.1 million and remains below the historical average of $55.7 million. The declines were largely due to the aforementioned declines in cash balance.
• The all-in rate for loans in the dashboard is 9.29%, flat QoQ and 114 bps lower YoY, as rate cuts continue to show in quarterly financials. Benchmark spreads have remained relatively unchanged at 5.53%.
• Capitalized interest/payment-in-kind (PIK) is 2.1% across the portfolio, down 13 bps QoQ and 69 bps YoY. For the 34.5% of the RRLs in the dashboard currently reporting a capitalized interest/PIK balance, their capitalized interest/PIK as a percentage of principal was 5.73%, down 33 bps and 186 bps QoQ and YoY, respectively.
• Managers identified four new borrowers that flipped from ARR covenants to EBITDA during Q1 2026, compared to four in the prior period.
• No defaults were reported for the period.
• KBRA has observed an increase in loan count concentration within rated RRL ABS, partially due to an artificial intelligence-related origination slowdown. While portfolio concentration is a credit negative, KBRA believes the related tighter asset underwriting standards and structural protections inherent in KBRA-rated RRL ABS should continue to provide meaningful credit enhancement as portfolios season.

Click here to view the report.

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About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1015866

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