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 24 KBRA-rated RRL asset-backed securities (ABS) transactions. This update incorporates collateral tapes dated as of June 2026, which include 104 unique obligors.

Weighted-Average Portfolio Key Statistics

  • Credit performance remained stable during Q2 2026, with no defaults reported. Three borrowers transitioned from annual recurring revenue (ARR) to traditional EBITDA-based covenants, compared with four in the prior quarter.

  • For borrowers represented in both periods, weighted average (WA) ARR remained stable, with a slight increase quarter-over-quarter (QoQ). For the overall dashboard population, the WA ARR was $170.3 million, down 4.1% QoQ and 6.6% year-over-year (YoY), primarily reflecting positive portfolio migration as larger, more seasoned borrowers transitioned from ARR to traditional EBITDA-based covenants and exited the RRL dashboard population.

  • Liquidity cushion (cash plus available committed credit, less minimum required liquidity) increased to $55.5 million, up 10.9% QoQ but down 8.6% YoY, and remained slightly below the historical average of $55.7 million. Balance sheet cash is $34.6 million, up 4.3% QoQ but down 27% YoY, and remains below the historical average of $47.4 million. The YoY decrease is primarily due to portfolio composition changes and, to a lesser extent, lower cash balances among borrowers represented in both periods.

  • The WA debt-to-ARR ratio improved to 1.6x, decreasing 1.3% QoQ and 1.1% YoY. In contrast, the WA loan-to-value ratio increased 123 basis points (bps) QoQ and 445 bps YoY to 31%. Both metrics were relatively flat QoQ for the continuing borrower population.

  • The WA all-in interest rate for loans in the dashboard is 9.33%, nearly flat QoQ and 85 bps lower YoY. The WA benchmark spread is relatively flat QoQ and 25 bps lower YoY, mostly due to borrowers with higher spreads exiting the dashboard.

  • Capitalized interest/payment-in-kind (PIK) is 2.3% of outstanding principal across the portfolio, up 13 bps QoQ and 4 bps YoY. For the 34.7% of RRLs in the dashboard currently reporting a capitalized interest/PIK balance, their capitalized interest/PIK as a percentage of principal was 6.03%, up 30 bps QoQ but down 13 bps YoY.

  • The median unique RRL obligor count declined to 13 obligors per transaction from 15 in the prior period. The decrease is reflective of continued portfolio seasoning due to loan conversions and repayments, as well as slower overall RRL origination.

Click here to view the report.

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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.

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