...- Cobra Equity Holdco LLC reported a significant decline in adjusted total equity (ATE) in the second and third quarters of 2022, mostly because of reclassification of most of its on-balance-sheet loans to held for sale from held for investments. - As a result, Cobra's leverage, as measured by debt to ATE, was 9.02x as of Sept. 30, 2022, well above our downside threshold of 6.5x. - We lowered our issuer credit rating on the company to 'B-' from 'B'. We also lowered our issue rating on the unsecured notes by two notches to '###' from 'B-', indicating a significant rise in priority debt in the form of risk retention financing and an unencumbered assets to unsecured debt ratio of well below 1.0x. - The stable outlook reflects our expectation that over the next 12 months, the company will operate with leverage of 8x-12x, adequate liquidity, and manageable deterioration in loan portfolio, despite macroeconomic headwinds....
