KBRA Affirms Ratings for HG Global Ltd.
27 Mar 2026 | New York
KBRA affirms the issuer rating of BBB- for HG Global Ltd. (“HG Global”) and the long-term credit rating of BBB for the $150 million Senior Secured Term Loan. The Outlook for both ratings is Stable.
The Term Loan (the “Loan”) is secured by a first-priority interest in the capital stock of HG Holdings Ltd. (“HG Holdings”), a wholly owned subsidiary of HG Global. HG Holdings has access to (i) all accrued interest on Build America Mutual Assurance Company’s (“BAM”) surplus notes held outside of the collateral trusts and (ii) all releases of excess funds from the collateral trusts at HG Global’s wholly owned reinsurance subsidiary, HG Re Ltd. (“HG Re”). The transaction requires the maintenance of an Interest Reserve Account equivalent to eight quarters of interest payments, which provides a liquidity buffer to mitigate potential timing mismatches between available cash flows and debt service obligations. HG Global also maintains additional liquidity at the holding company and has access to supplementary short-term liquidity support, including an intercompany borrowing facility.
KBRA’s rating reflects an evaluation of the transaction structure and a quantitative assessment of BAM’s insured portfolio and projected cash flows to HG Global. Loan repayment is primarily supported by releases of excess funds from HG Re’s collateral trusts and payments on BAM’s surplus notes. Collateral trust releases are dependent on the level of assets relative to required collateral thresholds and are driven by earned premium, investment income, claims experience, and insured portfolio performance, while surplus note payments remain subject to BAM’s financial performance and regulatory approval.
The rating is principally supported by the continued adequacy of collateral trust resources relative to modeled stress losses generated from BAM’s insured portfolio. KBRA’s analysis continues to indicate that, under stress scenarios consistent with the current rating level, modeled losses attributable to HG Re can be absorbed within available trust resources while maintaining sufficient cash flow to support repayment of the Loan.
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