A pool of subscription lines supported by a pool of limited partner's uncalled capital commitments will collateralize $500 million Capital Street Master Trust, 2026-2, a series composed of notes and equity.
Proceeds are the latest issuance from the Capital Street Master Trust, the third outstanding series and the fourth overall, and the deal is slated to close on July 28, according to S&P Global Ratings.
Capital Street managed the pool of capital call loans, a form of bridge financing extended to investors typically used to buy securities. Generally secured, they pay higher interest rates but offer flexibility in repayment.
The issuer's notes have a reinvestment period that is expected to end on Feb. 1, 2028, say analysts at Morningstar DBRS, which also assessed the notes.
Capital Street is the servicer, and
The notes with the expected AAA ratings from S&P Global markets, should pay 110 basis points over the one-month, CME term Secured Overnight Financing Rate (SOFR). S&P did not rate the class B notes but did say they would pay 135 basis points over one-month CME SOFR.
Noteholders will be repaid the accrued and unpaid fees, expenses and indemnities owed to the transferor trustee and the owner trustee, on a pro rata basis, capped at $100,000 each year.
Most of the waterfall, in fact, will repay fees and interest, and any deficit or default amounts, until an early amortization event occurs. At that point, or 15 months after the reinvestment period ends—whichever comes first—the remaining non-principal collections for the previous collection period will be treated as available principal collections in an amount up to the note principal balance.
All the notes have a legal final maturity date of Aug. 16, 2030, according to the rating agencies.
When the deal closes, the collateral pool is expected to have 43 subscription lines from 35 general partners representing six investment fund strategies, the rating agency said. The underlying subscription lines have advance rates ranging from 40% to 90%, with a weighted average (WA) advance rate of about 63%, S&P said.
Subordination provides credit enhancement to the notes, the rating agencies said.
Aside from S&Ps' ratings, DBRS assigns (P) AAA (sf) and (P) AA (sf) to classes A and B, respectively.
