KBRA assigns a BBB rating with a Stable Outlook to the $750 million senior unsecured notes issued by Cantor Fitzgerald, L.P. (“Cantor” or “the firm”). The notes are scheduled to mature on December 12, 2028. Domiciled in New York, NY, Cantor is a full-service, globally diverse capital markets and investment banking firm with controlling stakes in wholesale finance brokerage and commercial real estate brokerage and services companies. Use of proceeds will be for general corporate purposes, including repayment of Cantor’s outstanding 4.875% notes that mature in May 2024.

Key Credit Considerations

The rating is underpinned by management’s long record of producing mostly stable operating results, adapting to regulatory changes and market evolution, ongoing emphasis on risk management, and consistent financial leverage and liquidity management policies. Cantor’s lower risk matched-book, securities trading operation, and agency brokerage business model that contribute to a higher quality balance sheet, also support the rating.

Profitability, while reasonably stable, is somewhat low for the rating category, primarily due to elevated compensation expense (although a sizeable percentage is variable and non-cash). While revenue performance generally follows the contours of capital markets conditions, KBRA considers it to be sufficiently diversified to absorb an environment of subdued transactions and trading.

Leverage, on a net basis, has been managed steadily over an extended period and remains commensurate for the rating category. Cash coverage of short-term obligations and aggregate liquid assets and contingency funding coverage of unsecured debt remains adequate. Reliance on short-term debt is low; long-term debt maturities are well staggered.

Rating Sensitivities

The rating is well positioned in the current category. Although not expected, a change in the firm’s stringent enterprise risk management policies and practices or liquidity management would pressure the rating. A change in the revenue profile – most likely from a secular dislocation in the wholesale brokerage or commercial real estate brokerage and financing business – would cause the rating to be reevaluated, especially if there were not compensating expense reductions.

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Methodologies

Financial Institutions: Securities Firm Global Rating Methodology

ESG Global Rating Methodology

Disclosures

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: 1002817

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