KBRA releases an updated report tracking key metrics within recurring revenue loan (RRL) securitizations.

This report, an update to our Q2 analysis, continues to track and present several key metrics in a dashboard format, sourced from quarterly collateral loan tapes provided by the issuers of KBRA-rated RRL asset-backed securities (ABS). This update incorporates collateral tapes dated as of September 2025.

Key Takeaways

• On an aggregate portfolio basis, the weighted average (WA) annual recurring revenue (ARR) for the dashboard population has increased approximately 0.3% quarter-over-quarter (QoQ) to $182.8 million. The WA ARR metric is down 17% on a year-over-year (YoY) basis, but remains 4.5% above the historical average of $174.8 million.
• The debt-to-recurring revenue (debt/RR) ratio continued to decrease, and was down 2.7% QoQ and 19.3% YoY to 1.6x. The average loan-to-value (LTV) ratio is up 1.7% QoQ but down 2% YoY to 28.2%.
• Balance sheet cash fell 10% QoQ and 7.3% YoY, and remains below the historical average of $48.9 million. The reduction is mainly driven by a handful of borrowers reporting larger reductions in cash balances, and in part by loan conversions.
• Liquidity cushion has decreased 4.1% QoQ and 14.3% YoY, but is still above the historical average of $55.8 million.
• The all-in rate for the loans in the dashboard is 9.77%, down QoQ and 1.6% lower YoY, as the rate cuts of 2024 continue to show up in quarterly financials and excess capital supply compresses loan spreads. Payment-in-kind (PIK) interest is up 0.2% QoQ but down 0.3% YoY. Just over one-third of the RRLs in the dashboard currently report a PIK balance, which is flat QoQ.
• Managers have identified three new borrowers that have flipped from ARR covenants to EBITDA during Q3 2025 (six in prior period).
• No defaults were reported for the period.

Click here to view the report.

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About KBRA

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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