Fitch rates Oaktree Strategic BBB-

Fitch Ratings said it assigned expected BBB- ratings to Oaktree Strategic Credit Fund, its secured revolver credit facilities and planned unsecured debt offering. The outlook is stable.

In a related story on Monday, Prospect News reported Oaktree plans to sell the notes in a Rule 144A offering.

“The ratings reflect the senior focus of OSCF's investment portfolio, strong portfolio diversification, appropriate leverage target, a sound liquidity profile, and Fitch's expectations that unsecured debt will increase to at least 35% of total debt within the outlook horizon,” the agency said in a press release.

However, “Rating constraints include OSCF's short operating history; elevated growth; potential funding constraints as continuous fundraising will require additional term-debt issuance to sustain unsecured funding at 35% of total debt,” Fitch said.

The agency said it expects OSCF to maintain its focus on first-lien debt investments, gradually lower Level 2 investments, deliver consistent core earnings generation and maintain the asset coverage cushion at or above 25% and the unsecured funding mix at or above 35%.

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