UK businesses drastically overestimate their AI progress

KBRA UK (KBRA) assigns preliminary ratings to five classes of notes issued by Golub Capital Partners Euro CLO 89(M) DAC, a cash flow collateralised loan obligation (CLO) backed primarily by a diversified portfolio of middle market corporate loans.

Golub Capital Partners Euro CLO 89(M) DAC is managed by GC Investment Management LLC (“GCIM” or the“collateral manager”). The CLO will have a 4.4-year reinvestment period and a 13-year legal final. The ratings reflect initial credit enhancement levels, coverage tests including par value and interest coverage tests, excess spread, and a reinvestment overcollateralisation test.

The collateral in Golub Capital Partners Euro CLO 89(M) DAC will mainly consist of middle market loans issued by corporate obligors diversified across sectors. The target portfolio par amount is €350.0 million with exposures to 50 obligors. The obligors in the portfolio have a K-WARF of 3154, which represents a weighted average portfolio assessment of approximately B-.

GCIM is a UK-based subsidiary of Golub Capital, a global private credit asset manager with approximately $90 billion of capital under management as of 2026. Founded in 1994, the firm focuses primarily on direct lending and credit investing across middle market companies and maintains long-standing relationships with private equity sponsors, institutional investors and corporate borrowers. Golub Capital operates across North America and Europe and employs more than 1,100 professionals dedicated to underwriting, portfolio management, capital markets and operational support activities.

Class A-1, B, C and D Notes are denominated in Euro, and Class A-2 Notes is dominated in GBP sterling. The ratings on the Class A-1 and A-2 Notes consider the timely payment of interest and ultimate payment of principal by the applicable stated maturity date, while the ratings on the Class B, C and D Notes consider the ultimate payment of interest and principal by the applicable stated maturity date.

To access ratings and relevant documents, click here.

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Methodologies

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 Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union. Information on a credit rating’s endorsement status is available on its rating page at KBRA.com.

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.

There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA’s Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.

About KBRA UK

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. Kroll Bond Rating Agency UK is located at 1st Floor, Marble Arch House, 66 Seymour Street, London W1H 5BT, England.

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