DBRS Morningstar has Revised the Trend of the Rating to Positive from Stable
Hercules Capital, Inc. (“Hercules” or the “Company”), the largest and leading specialty financing provider to innovative venture, growth and established announced that DBRS, Inc. (“DBRS Morningstar”) has reaffirmed Hercules’ investment grade corporate rating of BBB. DBRS Morningstar issued a statement announcing the reaffirmation of the rating and revision of the trend on the rating to a positive outlook from stable, as well as its underlying analysis.
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“We are very pleased that DBRS has reaffirmed our BBB investment grade corporate and credit rating and revised our trend to positive”
“We are very pleased that DBRS has reaffirmed our BBB investment grade corporate and credit rating and revised our trend to positive,” stated Seth Meyer, chief financial officer of Hercules. “This rating reflects the scale and performance of our differentiated venture and growth stage lending strategy and commitment to disciplined underwriting, as well as the depth and capabilities of our management team and ability to continue with our managed growth strategy.”
The reaffirmed BBB rating reflects the Company’s scale, moderate financial leverage, solid risk management framework and sound portfolio monitoring performance. DBRS also noted Hercules’ concentration in first-lien senior secured debt investments, diversified funding with strong access to the capital markets, track record of low levels of non-accruals and minimal net realized losses on investments since inception in 2003.
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The Positive trend reflects the strength of Hercules’ franchise that has sustained strong operating performance through business cycles and well-placed positioning in a rising interest rate environment. The trend also considers DBRS Morningstar’s view that the geopolitical instability, while increasing risk to the continued U.S. economic recovery, will not overly burden VC-backed companies. Hercules’ technology and life sciences portfolio companies have largely been able to push through rising costs to their customers, which helps mitigate the profit margin pressures in their products and services as a result of inflation, supply-chain disruptions and increased energy costs.
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