Market Overview

KBRA Assigns Preliminary Ratings to Elm 2020-3 Trust

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Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Elm 2020-3 Trust (the "Issuer" or "Elm 2020-3"), a venture capital backed life sciences and technology loan securitization for MidCap Financial Services, LLC ("MidCap" or the "Company") in 2020 and the third overall venture capital backed transaction for MidCap.

MidCap is a middle market-focused, specialty finance firm which was founded in 2008 that provides senior debt financing to companies across a wide range of industries. The Company provides loans intended to finance growth and manage working capital. MidCap has a focus on the direct origination of life sciences loans, technology loans, asset-backed loans, leveraged loans, real estate loans, lender finance loans, and franchise loans.

This transaction is secured by an initial pool comprised primarily of:

(1) First lien term loans to life sciences companies,

(2) First or second lien term loans to technology companies and

(3) Fully funded pari passu participations in senior secured revolving loans to technology companies.

Click here to view the report. To access ratings and relevant documents, click here.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

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 U.S. Information Disclosure Form 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 U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.

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