KBRA Affirms Ratings for Millennium Consolidated Holdings, LLC

KBRA affirms the issuer and senior unsecured debt ratings of BBB- for Charlotte, North Carolina-based Millennium Consolidated Holdings, LLC (“MCH”). Additionally, KBRA affirms the issuer rating of BBB for the wholly owned U.S. lead operating subsidiary, Millennium Advisors, LLC ("MADV" or “the firm”), an SEC-registered broker-dealer. The Outlook for all ratings is Stable.

Key Credit Considerations

The ratings are supported by KBRA’s favorable view of the execution-focused and flow trading business model based on smaller securities positions in which the management team has substantial operating experience. The growing scale diversification – geographical and product – together with the ongoing opportunity to optimize the highly automated platform remain key elements to MADV’s defensible competitive position.

The lower risk, flow-oriented securities trading with high inventory turnover of relatively small position sizes contributes to a higher quality balance sheet; proprietary securities positions are generally limited and used to facilitate the client flow trading business and are subject to strict position aging limitations.

The secular earnings outlook continues to be favorable, underpinned by the proliferation of debt, globally, which precipitates the need for client relative value trading and portfolio rebalancing activity, and has contributed to elevated interest rate and credit spread volatility, both of which are positive for trading volume and bid-ask spreads – key drivers to profitability.

Financial leverage is modest, even after the 2025 debt offerings at both MCH and MADV, which resulted in some increase in absolute debt outstanding after refinancing all existing debt. The purpose of the incremental debt issuances was to support business activity at MADV and other subsidiaries, including capital support for trading and counterparty margin requirements and to continue the self-clearing of trades initiative, which is projected to improve net profits from improving financing levels and reducing third party clearing friction (e.g., netting, trade ticket costs).

Rating Sensitivities

Positive ratings would most likely develop from continued revenue diversification, geographically and by product, and an improvement in bottom line profitability from the firm’s various business initiatives. Conversely, although unlikely, a significant erosion in the firm’s competitive position could have adverse rating implications if counterbalancing measures were not taken. Also, a deterioration in the firm’s capital and leverage profile; violation of any other applicable contractual covenants; or the emergence of unexpected operational issues, given the reliance on technology, could put downward pressure on the ratings.

To access ratings and relevant documents, click here.

Methodologies