Private Markets

A NAV (net asset value) loan is a fund-level financing facility secured by, or linked to, the underlying assets of a private fund. It is one of several fund-level financing structures, alongside subscription lines, hybrid facilities, and other forms of fund finance, used within private market fund structures.

As these structures become more widely used and their features evolve, independent credit ratings may provide an opinion on credit risk. Such ratings can contribute to greater transparency and facilitate clearer communication of credit risk among lenders, investors, and other market participants.

Private markets participants, including banks, insurers, and asset managers, may reference independent credit ratings and analytical assessments as part of their approach to understanding, comparing, and communicating credit risk. These solutions provide a common analytical perspective that can be used in discussions related to private market investments, including considerations around capital structures, regulatory frameworks, and investor communication.

A credit rating is a formal, forward-looking opinion of creditworthiness assigned using established methodologies and supported by ongoing surveillance and may be referenced in contexts where a widely recognized, regulated assessment of credit risk is relevant. A credit estimate provides an indication of likely creditworthiness for an unrated entity, typically based on available information and without direct engagement with the issuer, and may be referenced in applications such as CLO structuring or internal portfolio risk analysis. A private credit analysis builds on a credit estimate by providing a more detailed, point-in-time analytical opinion accompanied by a written analytical explanation but does not include a public rating or ongoing surveillance.

Public, private, and confidential credit ratings are all produced using the same analytical methodologies, standards, and governance processes, with the distinction relating to how the rating is distributed. A public credit rating is made available broadly through published reports and public platforms. A private credit rating is shared with a limited group of named third parties, such as investors or lenders, to support specific transactions or investment decisions. A confidential credit rating is provided solely to the issuer for internal use and is not distributed externally. This flexibility allows market participants to choose the level of transparency that best supports their financing, regulatory, and communication needs. The distinctions relate solely to distribution and do not affect the analytical opinion expressed by the rating.