S&P: Oaktree Capital notes A-

Standard & Poor’s said it assigned an A- rating on Oaktree Capital Management LP’s proposed issuance of $100 million senior unsecured notes due in July 2031.

The long-term issuer credit rating on Oaktree is A- with a stable outlook.

The $100 million notes issuance, a private debt placement, will be issued by Oaktree Capital Management and will be fully and unconditionally guaranteed by Oaktree Capital I LP, Oaktree Capital II LP and Oaktree AIF Investments LP on a joint and several basis.

The proceeds will be used to pay down a portion of its $250 million term loan due on March 31, 2021.

Pro forma for this transaction, the agency said it expects total funded debt to remain at $850 million with total debt-to-adjusted EBITDA at less than 1.5x, S&P said.

The ratings reflect the company’s high share of stable funds with multi-year lock-ups that provide a very predictable form of income, long track record of successful investing with good investment performance, strong balance sheet, recurring stable revenues and cash flows and debt-to-EBITDA at less than 1.5x, the agency said.

The company’s exposure to high-yield and distressed-debt investments weigh heavily on the ratings, S&P said.

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