KBRA Assigns Rating to HG Global Ltd.

KBRA assigns an issuer credit rating of BBB- to HG Global Ltd. and a long-term credit rating of BBB to the $150 million Senior Secured Term Loan. The Outlook for both ratings is Stable.

HG Global Ltd. (“HG Global”) is issuing a Term Loan (the “Loan”) in the aggregate principal amount of $150 million. The Loan is anticipated to close on March 31, 2022, with funding on or before May 31, 2022.

The Loan is secured by a first priority interest in the capital stock of HG Global’s wholly-owned subsidiary HG Holdings Ltd. (“HG Holdings”) which in turn has access to (i) all accrued interest on Build America Mutual’s (“BAM’s”) surplus notes that is held outside of the collateral trusts and (ii) all releases of excess funds from the collateral trusts at its wholly owned reinsurance subsidiary HG Re Ltd. (“HG Re”). The transaction requires the maintenance of an Interest Reserve Account containing eight quarters of interest payments, which will serve as a liquidity buffer at the HG Global level to cover potential timing mismatches from available cash flows and debt service on the Loan.

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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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