Clipper Acquisitions Corp. (TCW)

The stable outlook on TCW reflects S&P Global Ratings' expectation for the company to have flat to modestly lower EBITDA in 2019 and 2020. It also reflects our expectation for leverage to remain roughly stable, fluctuating around 2x in 2019 and 2020. We could lower the ratings if leverage rises above 3x on a sustained basis. We could also lower the ratings if investment performance deteriorates meaningfully or we observe significant net outflows that we believe indicate TCW's competitive position has worsened. We could raise the ratings if we believe the company has the commitment to maintain leverage below 2x on a sustained basis and the company's investment performance and net flows improve. We expect EBITDA to stay flat to

...Flows have been negative over the last 12 months. Retail clients and fixed income products have been the main driver of total net outflows, although equity products have also been a contributor. However, assets under management (AUM) is still up modestly year over year to $205 billion as of June 30, 2019, due to market appreciation. Investment performance remains mixed. Despite having good long-term track records, more near-term performance has been mixed in key fixed income strategies. Furthermore, equity product performance remains challenged. Leverage is relatively conservative, and we expect little change to key metrics in 2019 and 2020. We expect TCW's leverage to fluctuate around 2x in 2019 and 2020 under our base-case scenario. This is better than some '##+' peers such as FEH Inc. (2019 leverage expectation: 2.9x to 3.3x), but worse than some '###-' rated peers such as MIPL Group Ltd. (2019 leverage expectation: no net leverage)....

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