KBRA assigns preliminary rating to one class of notes issued by Kobalt Music Assets LP, Series 2024-1 (Kobalt 2024-1), a music royalty ABS transaction. Kobalt Music Assets LP (the Issuer) represents Kobalt Music Group’s first music royalty securitization. The transaction is collateralized by royalties from a music catalog (the Catalog) of content with over 5,000 works from top artists and songwriters, including AJR, YoungBoy Never Broke Again, Busta Rhymes, and Jessie J, which are among the largest in the Catalog by net publisher share. Royalty payments from the Catalog are all from musical compositions and musical publishing rights. An independent third-party valuation firm determined a valuation of $410.0 million as of September 30, 2023 for the Catalog using a discounted cash flow method.

Proceeds from the Series 2024-1 (the Notes) issuance are expected to be used to fund the reserve accounts, pay certain transaction expenses, repay existing indebtedness, and for other general corporate purposes. The Notes pay interest on a quarterly basis and are not scheduled to pay down principal prior to the April 2029 anticipated repayment date (ARD) for the Notes. Prior to the ARD, the only required principal payments are to maintain compliance with the borrowing base requirement which is a function of the note advance rate and the collateral value derived from the present value of the Valuation Agent’s annually updated valuation.

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Methodologies

• ABS: General Global Rating Methodology for Asset Backed Securities
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

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.

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.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency 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 by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1003274

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