KBRA releases research on private credit ratings in the structured finance (SF) landscape, providing an overview of this market and detailing rating activity and performance.

Once considered a niche market, private credit securitizations have become a core element of the SF landscape, particularly within the asset-backed securities (ABS) and structured credit (SC) sectors. Since 2022, approximately 20% of all KBRA-rated SF transactions and 12% of rated SF volume have been privately placed. The share of private placements in ABS and SC reached nearly 30% and 65%, respectively, over the same period. The rise in private credit SF has been driven by increased demand from alternative investment managers—which may seek bespoke structures to align with specific investment objectives—as well as a growing preference among certain SF issuers for greater flexibility, customization, and confidentiality in execution.

This report outlines key factors driving private rating assignments in KBRA’s SF ratings universe. It also highlights the SF asset classes where KBRA has observed the most significant levels of private rating activity and evaluates the relative stability and performance of KBRA private ratings compared to their public counterparts.

Key Takeaways

• KBRA’s privately rated transactions have been largely concentrated in the ABS and SC sectors. In contrast, privately rated commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities (RMBS) have remained limited.
• Approximately 22% and 56% of all KBRA-rated ABS and SC transactions have been privately rated since we issued our first SF rating in 2011; however, since 2022, that percentage has risen to 27% and 65%, respectively.
• KBRA’s private ratings are assigned and monitored using the same methodologies, processes, and staff as KBRA’s public ratings. Regardless of whether a rating is private or public, KBRA assigns and surveils its ratings to adhere to the same rating definitions.
• KBRA’s private SF ratings exhibited a higher KBRA Stability Ratio (KSR) than public SF ratings across nearly all rating categories over their lifetime from 2011 to 1H 2025. The overall lifetime KSR for private SF ratings was 97.7%, compared to 96% for all public SF ratings.

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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: 1010376

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