KBRA Publishes Senior Unsecured Debt Rating for Millennium Consolidated Holdings, LLC

KBRA publishes the senior unsecured debt rating of BBB- with a Stable Outlook for Millennium Consolidated Holdings, LLC (“the company”). On May 9, 2018, KBRA assigned a senior unsecured debt rating of BBB- and Stable Outlook on an unpublished basis. On May 3, 2024, KBRA affirmed the senior unsecured debt rating of BBB- and Stable Outlook on an unpublished basis. At the same time, KBRA assigns a BBB- rating to the company’s $52.5 million, 8.375% senior unsecured debt issuance that matures on March 1, 2030.

Key Credit Considerations

The ratings are supported by KBRA’s favorable view of MCH’s management team and highly focused and optimized business model. Management has a proven track record in electronic fixed income trading historically, including through various operating environments. Risk management continues to be hallmark of the franchise. Policies, monitoring, and testing are all key elements; of note, risk officials generally have realized trading experience, which heightens the overall quality of the risk apparatus, in KBRA’s view. Operational risk management remains at the forefront of the company’s business model given the focus on electronic delivery and execution, though it certainly appears to be well managed, with an established favorable track record.

The lower risk, flow-oriented securities trading operation that has historically contributed to a higher quality balance sheet also support the ratings. Pro forma financial leverage is modest; in 2023, the company retired $50 million in senior unsecured debt. Short-term corporate debt is not used.

The ratings are constrained primarily by the somewhat narrow operating model, although both geographical and product diversification continues, which could portend positive ratings in the intermediate term.

Rating Sensitivities

Positive ratings would most likely develop from continued revenue diversification, geographically and by product, which would also lessen correlated trading risk. Conversely, a significant erosion in the company’s competitive position could have adverse rating implications if counterbalancing measures were not taken. A deterioration in the company’s capital and leverage profile, violation of any other applicable contractual covenants, or the emergence of unexpected operational or technology issues could put downward pressure on the ratings.

To access ratings and relevant documents, click here.

Methodologies

• Financial Institutions: Securities Firm Global Rating Methodology
• ESG Global Rating Methodology

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: 1007904

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