Fitch rates MidCap BB+, notes BB

Fitch Ratings said it assigned MidCap FinCo Intermediate Holdings Ltd. and its subsidiary MidCap Financial Issuer Trust BB+ long-term issuer default ratings. Concurrently, Fitch also gave an expected BB rating to MidCap Financial's proposed $825 million of senior unsecured notes.

“The ratings reflect MidCap's strong middle-market franchise and relationship with Apollo Global Management, Inc. (Apollo; rated A/stable), which provides access to industry relationships and deal flow, lower-risk portfolio profile, low portfolio concentrations, minimal exposure to equity investments, relatively strong asset quality historically and experienced management team,” the agency said in a press release.

The unsecured debt rating is a notch below the IDR given the high balance sheet encumbrance and the largely secured funding profile, indicating weaker recovery prospects under a stress scenario, Fitch said.

Proceeds are expected to be used to refinance unsecured debt.

The outlook is stable. The outlook reflects an expectation that MidCap will retain underwriting discipline, demonstrate reasonably sound credit performance, keep leverage within the targeted range and maintain adequate liquidity to navigate the currently challenging economic environment, the agency said.

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