Allspring Buyer LLC

The stable outlook reflects our expectation that Allspring will maintain leverage, as measured by debt to adjusted EBITDA, of 4.0x-5.0x over the next 12 months, while also maintaining its investment performance, AUM levels, and profitability. We could lower our ratings if leverage rises above 5.0x or if Allspring's business deteriorates, as demonstrated by a meaningful decline in earnings, AUM, or investment performance. We do not anticipate raising the ratings over the next 12 months. In the longer term, we could raise the ratings if the company's profitability metrics significantly increase while investment performance is strong and long-term AUM exhibits meaningful growth. We could also consider an upgrade if the company operates with leverage below 4.0x on a sustained basis. We

...Allspring Buyer LLC's leverage, as measured by debt to adjusted EBITDA, is 4.0x-5.0x on a weighted basis. Leverage reached this level as a result of a $1.1 billion term loan in 2021. We do not net cash because of financial sponsor ownership. Fee pressure has continued, owing to a large concentration in money market and fixed-income strategies. These lower-fee-rate money market and fixed-income strategies made up 80% of AUM as of year-end 2021. Fee pressure for money market strategies may lessen as interest rates rise. Allspring's profitability is weaker than peers'. The adjusted EBITDA margin was approximately 20% for 2021, well below that of leading managers....

Full Report