KBRA Assigns Rating to North Haven Private Income Fund LLC's $300 Million Senior Unsecured Notes due 2028
KBRA assigns a BBB rating to North Haven Private Income Fund LLC's ("North Haven" or "the company" or "PIF") $300 million, 5.125% senior unsecured notes due in 2028. The rating Outlook is Stable. The proceeds will be used for general corporate purposes.
Key Credit Considerations
The ratings and Outlook are supported by North Haven's strong ties to the ~$1.6 trillion in assets under management and/or supervision of Morgan Stanley Asset Management. The company benefits from investment banking, global capital markets, investment management, and wealth management within the Morgan Stanley (NYSE:MS) ecosystem in addition to MS' robust sponsor and banking relationships. As part of the MS ecosystem, North Haven leverages the broad MS private credit ("MSPC") platform, which includes $21.6 billion of committed capital in direct lending along with SEC exemptive relief to co-invest with certain other affiliated investment vehicles managed by the company's adviser, MS Capital Partners Inc. ("MS Capital") or its affiliates. Furthermore, as of 2Q25, North Haven's $6.6 billion diversified investment portfolio at fair value (FV) was comprised of a significant percentage of senior secured first lien loans at 98.5% spread across 323 companies in 43 industries, primarily in less cyclical sectors. The investment portfolio's median EBITDA is $90.3 million, and the top three sectors are Software (21.7%), Insurance Services (10.3%), and Commercial Services & Supplies (8.6%). These sectors are less likely to be directly impacted by proposed tariffs. Asset quality is solid with five portfolio companies on non-accrual, representing 1.1% and 0.5% of total investments at cost and FV, respectively, as of 2Q25. While the investment portfolio is relatively unseasoned due to the company's short operating history, 98.4% of the portfolio maintains an internal rating of 2 or higher, indicating that loans are performing at or above expectations at underwriting.
At 2Q25, North Haven maintained gross leverage of 0.90x, lower than its target leverage range of 1.0x to 1.25x and well within the regulatory minimum asset coverage ratio of 150%. North Haven's funding mix is solid and includes a corporate revolver, SPV asset-based facilities, and senior unsecured notes. In September 2025, PIF further improved its funding profile by amending its JP Morgan and Wells Fargo SPV funding facilities to extend the maturity dates of each to September 2030 and decrease the applicable margin reference rate from 225 bps to 190 bps for both. As of 2Q25, ~47.5% of the company's total debt outstanding is senior unsecured debt, providing greater financial flexibility for weaker markets and low asset encumbrance for the benefit of the senior unsecured noteholders. As a perpetual-life continuously offered BDC, the company raised ~ $3.6 billion of capital since inception, including $417.7 million ($88.4 million of reinvested distributions) for the six months ended 2Q25. PIF's repurchases for 1H25 were $172.3 million. Redemptions are limited to 5% per quarter and are at the discretion of the board of directors. The company maintains solid liquidity through available credit lines and targets more liquid broadly syndicated loans at 10% to 15% of the total portfolio to meet potential redemptions. Liquidity remains solid with sufficient bank credit availability of ~$2.2 billion and $181.5 million of unrestricted cash and cash equivalents set against $311 million of notes due within the next two years and total unfunded commitments of $975.1 million at 2Q25.
Counterbalancing North Haven's credit strengths are the company's limited operating history offset by the long tenure of its management in private credit, the relatively illiquid investments, retained earnings constraints as a regulated investment company ("RIC"), and an uncertain economic environment with high base rates, inflation, and geopolitical risk that could increase non-accrual loans.
North Haven Private Income Fund LLC is a New York based, externally managed, non-diversified, private, perpetual-life, closed-end investment management company regulated as a business development company under the Investment Company Act of 1940. For tax purposes, the company has elected to be treated as a RIC. North Haven commenced operations on February 1, 2022. MS Capital Partners Adviser Inc. is North Haven's investment adviser. MS Capital is a wholly owned subsidiary of Morgan Stanley, a leading global investment bank. North Haven is not a subsidiary nor consolidated with MS. Morgan Stanley has no obligation, contractual or otherwise, to financially support North Haven. North Haven's obligations are neither MS' obligations nor are they guaranteed by MS, and MS has no history of financially supporting any MS BDC even during periods of financial distress.
Rating Sensitivities
Given the Stable Outlook, a rating upgrade is not expected in the medium term. A rating downgrade and/or Outlook change to Negative could be considered if management alters its stated strategy by increasing its focus on riskier investments coupled with higher leverage metrics. A prolonged downturn in the U.S. economy with negative impact on North Haven's earnings performance, asset quality, and leverage or a significant change in senior management and/or risk management policies could also lead to negative rating action.
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Methodologies
Disclosures
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan's Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
Doc ID: 1011348
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Analytical Contacts
Josh Mandelbaum, CFA, Director (Lead Analyst)
+1 301-969-3186
[email protected]
Teri Seelig, Managing Director
+1 646-731-2386
[email protected]
Kevin Kent, Director
+1 301-960-7045
[email protected]
Business Development Contact
Constantine Schidlovsky, Senior Director
+1 646-731-1338
[email protected]