KBRA affirms ratings on Trapeza CDO X and XI notes

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Trapeza CDO ratings affirmed

Highlights

KBRA affirmed ratings on Trapeza CDO X ($177.6 million performing par, $324.7 million liabilities, $45.5 million defaults) and Trapeza CDO XI ($128 million performing par, $346 million liabilities, $85.4 million defaults).
Ratings on Trapeza X Class A-1/A-2 and Trapeza XI Class A-2/A-3 Notes cover timely interest payments and ultimate principal repayment by maturity.
Trapeza X Class B, C-1, C-2 and Trapeza XI Class B, C Notes ratings address ultimate payment of interest and principal, maintaining KBRA's stable credit view.

Portfolio performance and affirmed classes

As reported by Kroll Bond Rating Agency, the affirmed ratings cover notes issued by Trapeza CDO X, Ltd. and Trapeza CDO XI, Ltd., which hold TruPS securities, surplus notes and subordinated debt issued by community and regional banks, their holding companies, and insurance groups.

For Trapeza X, the portfolio at initial rating consisted of 28 assets with total collateral par value of $193.9 million and liabilities of $322.7 million. It now contains 25 assets with total performing par value of $177.6 million and liabilities of $324.7 million, while $45.5 million of defaults are recognized as of the latest portfolio date.

For Trapeza XI, the portfolio at initial rating consisted of 19 assets with total collateral par value of $134.3 million and liabilities of $327.1 million. It now contains 17 assets with total performing par value of $128 million and liabilities of $346 million, while $85.4 million of defaults are recognized as of the latest portfolio date.

Rating scope and structured finance impact

KBRA says its ratings on the Class A-1 and A-2 Notes of Trapeza X and the Class A-2 and A-3 Notes of Trapeza XI represent timely payment of interest and ultimate payment of principal by the applicable stated maturity date.

For the Class B, C-1 and C-2 Notes of Trapeza X, and the Class B and C Notes of Trapeza XI, the ratings consider the ultimate payment of interest and principal by the applicable stated maturity date. The action maintains the current credit view on two U.S. CDO structures backed by bank and insurance-related subordinated instruments.

Our earlier article on sovereign resilience in a higher-rate regime explained how persistent geopolitical shocks and elevated fiscal spending can amplify refinancing strain as global funding costs stay high. We noted that emerging and frontier markets are especially exposed because interest-service burdens can be heavy relative to narrower revenue bases, with energy and food price spikes adding to inflation and public-finance pressure.

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