Clipper Acquisitions Corp.

The stable outlook reflects our expectation that Clipper will operate with debt to adjusted EBITDA of 2.0x-3.0x during the next 12-24 months, and investment performance and organic flows will not meaningfully deteriorate despite higher volatility in financial markets. We could lower the ratings if leverage is sustained above 3.0x. We could also lower the ratings if investment performance or net flows weaken materially. We do not expect to raise the ratings in the next 12 months. Over the longer term, we could raise the ratings if we believe the company maintains leverage comfortably below 2.0x on a sustained basis and investment performance and net flows improve. U.S. real GDP of 1.7% in 2023 and 1.3% in 2024 Headline Consumer Price

...We expect Clipper Acquisitions Corp.'s leverage to remain comfortably at 2.0x-3.0x. Clipper's leverage, as measured by debt to adjusted EBITDA, increased to 3.1x in 2022, higher than our previous expectation, on lower AUM and increasing operational expenses. Higher personnel expenses related to bonus payments for a departing executive increased Clipper's overall expenses in 2022. As these non-recurring payments have generally been paid out, we expect overall expenses to taper in 2023 and support lower debt to EBITDA levels given we expect AUM to remain relatively flat. We expect market volatility over the next 12 months to continue to challenge AUM growth. Clipper Acquisitions Corp. experienced a decline in AUM in 2022 due to net outflows and market depreciation. Although we expect market appreciation and inflows from alternatives and international strategies in 2023, we expect AUM growth to remain challenged. We expect new leadership to capitalize on existing areas of the business. Katie...

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