On May 2, 2022, KBRA assigned issuer and senior unsecured debt ratings of BBB- to Barings Capital Investment Corporation (“BCIC” or “the company”). The ratings Outlook is Stable.

Barings Capital Investment Corporation’s BBB- issuer and senior unsecured debt ratings reflect the company’s $1.0 billion diversified investment portfolio, consisting of 172 portfolio companies across 25 sectors, which includes mostly senior secured loans (81%), with 73% comprised of senior secured first lien loans as of March 31, 2022. The company’s advisor, Barings LLC, is affiliated with MassMutual which was established in 1851 and had $895 billion of life insurance in force as of December 31, 2021. The ratings also consider the company’s access to Barings LLC’s $371 billion of diverse global assets under management, with $36 billion dedicated to private credit, and its modest leverage of 0.96x with a target range of 0.9x to 1.25x. The company has SEC co-exemptive relief to invest with Barings LLC’s other global fixed income platforms, including, as noted, $36 billion related to private credit. In addition, the company’s management team has decades of experience in the sector. These strengths are counterbalanced by the potential risk related to BCIC’s business as a regulated BDC, illiquid assets, high level of secured funding sources (82.9%), and short operating history of less than two years. In addition, the investment portfolio maintains a high level (30%) of investments that are considered “cross platform” consisting of equity, ABL, structured products, and investments in JVs, which is higher than peers and introduces increased earnings volatility.

Formed in July 2020, BCIC is a non-diversified, closed-end, non-traded business development company headquartered in Charlotte, North Carolina, regulated under the Investment Company Act of 1940 and is registered as a regulated investment company for tax purposes. MassMutual maintains 17.9% ownership in the company.

The ratings are based on KBRA’s Finance Company Global Rating Methodology published on November 28, 2017 and KBRA’s ESG Global Rating Methodology published on June 16, 2021.

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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 pursuant to the Temporary Registration Regime. 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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