Research Update: Clipper Acquisitions Corp. 'BB+' Rating Affirmed; Outlook Remains Stable; Recovery Rating Revised To '4'

Clipper Acquisition Corp.'s (TCW) leverage has declined in line with our previous expectations to around 2x, where we expect it to remain over 2019 and 2020. Additionally, AUM has recovered from its fourth quarter low, albeit largely as a result of market appreciation. TCW has had $8.8 billion in net outflows over the last 12 months ended March 31, which has been a headwind to growth. We are affirming our 'BB+' rating on TCW and its senior secured credit facility. At the same time, we are revising the recovery rating on the company's debt to '4' from '3', denoting our expectations for an average recovery in the event of a payment default. The stable outlook on TCW reflects S&P Global

...- Clipper Acquisition Corp.'s (TCW) leverage has declined in line with our previous expectations to around 2x, where we expect it to remain over 2019 and 2020. - Additionally, AUM has recovered from its fourth quarter low, albeit largely as a result of market appreciation. TCW has had $8.8 billion in net outflows over the last 12 months ended March 31, which has been a headwind to growth. - We are affirming our '##+' rating on TCW and its senior secured credit facility. At the same time, we are revising the recovery rating on the company's debt to '4' from '3', denoting our expectations for an average recovery in the event of a payment default. - 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 at around 2x in 2019 and 2020....

Research Update