KBRA Affirms and Subsequently Withdraws the Rating for a Subscription Facility Provided by BNP Paribas to Crown Asia-Pacific Private Equity IV plc

KBRA UK (KBRA) affirms and subsequently withdraws the AA- rating assigned to a senior secured revolving credit facility (the "Facility") to Crown Asia-Pacific Private Equity IV plc ("CAPE IV" or the "Fund") provided by BNP Paribas (the "Lender"). The Facility is a $50 million, provided solely by BNP Paribas. The Facility matures in December 2025. The Fund is managed by LGT Capital Partners (the "Firm"), and it is the Firm's fourth vintage focused on providing private equity exposure through primary, secondary and co-investment transactions in the Asia Pacific region. The rating action reflects the stable credit quality of the LP base and stable Fund performance since previous surveillance.

Key Credit Considerations

Financial Covenants and Structural Features: The primary collateral and source of repayment for the Facility is the total uncalled committed capital (UCC) of the Fund from the underlying limited partners (LPs). The Facility is required to comply with an Investment Cover Ratio covenant, requiring that the sum of the UCC of the Eligible LPs and net asset value (NAV) is at least 3.00:1 against the Fund’s total financial indebtedness. When the amount of UCC is equal to or less than 50% of the total LP commitments and the Investment Cover Ratio is greater than 3.00:1, the borrowing base availability is equal to approximately 77.0% of the UCC of the Eligible LPs minus the total financial indebtedness. This is equivalent to a minimum asset coverage level of the net UCC of 130% based on Eligible LPs. Otherwise, the borrowing base availability is equal to 66.7% of the UCC of the Eligible LPs minus the total financial indebtedness, equivalent to a minimum asset coverage level of the net UCC of 150% based on Eligible LPs. Assuming a fully drawn Facility, and taking into account the financial covenant requiring the ratio of the aggregate of UCC of the Eligible LPs and NAV to be at least 3.00:1 to total financial indebtedness, the minimum Asset Coverage for the Fund is greater than 300%, which remains in line with previous surveillance

Alignment of Interests: A failure to fulfil a capital call can result in the defaulting LP losing rights to distributions from the Fund and restrictions from investing in future private capital opportunities. Furthermore, in the event an LP defaults with respect to their obligation to meet capital contributions, the defaulting LP is subject to the application of various default provisions. Such provisions include but are not limited to (i) declaration of defaulting LP’s drawable commitments due and payable; (ii) suspension of distributions to defaulting LP; (iii) forfeiting the defaulting LP’s interest in the Fund; and (iv) selling all or any part of the defaulting LP’s interest. All of these provisions are strong incentives for LPs to meet capital calls.

Credit Quality of LP Commitments: KBRA’s assessment of the credit quality of the Eligible LPs was evaluated using (i) for rated entities (approximately 85.8% of commitments), the ratings assigned to the relevant LP or parent entity by KBRA or where a KBRA rating is not available, the public rating assigned by another rating agency and (ii) for unrated entities, KBRA's evaluation of the relevant LP’s credit quality. Overall, 95.7% of the Eligible LP's commitments have been evaluated to be equivalent to investment grade credit quality, in line with previous surveillance.

Diversification of LP Commitments: The diversification of the LPs’ commitments is determined utilising an adjusted Herfindahl-Hirschman Index (“adjusted HHI”). The adjusted HHI is 26.3 for the total LP base and 17.0 for the Eligible LPs which represents a relatively diverse LP base, in line with previous surveillance.

Additional Claim to Distributions/Illiquid Assets: To the extent that some or all of the LPs default on their obligation to fulfil capital calls and repay the Facility, the Lender may have recourse to other assets of the Fund (as an unsecured creditor of the Fund). While this is credit positive and offers a secondary repayment source for this Facility, the assets of the Fund consist of private equity investments which KBRA views as complex and illiquid relative to other asset classes and there is no certainty with regards to the ability of the Fund to sell and realise sufficient value from these assets.

Rating Sensitivities

Decline in LP Credit Quality: A decline in the credit quality of the Fund’s LPs as a result of: (i) deterioration in the credit quality of underlying LPs; (ii) transfer of interests to LPs of lower credit quality characteristics; (iii) inclusion of LPs with weak credit quality characteristics; and (iv) weaker than expected LP diversification, may result in negative rating changes.

Improvement in LP Credit Quality: An overall higher credit quality of the Fund’s LPs as a result of: (i) improvement in the credit quality of underlying LPs; (ii) transfer of interests to LPs with better credit characteristics; (iii) inclusion of LPs with strong credit quality characteristics; and (iv) stronger than expected LP diversification, may result in positive rating changes.

Underperformance of Fund Investments: A decrease in the Fund’s NAV due to underperformance of the Fund’s underlying investments may jeopardise debt repayment as the deterioration of the Fund may, for example, elicit hesitation of the Fund’s LPs to fund their respective capital calls regardless of their contractual obligations to do so and the underlying LPs’ security and protections to the Lender.

Quantitative Rating Determinants

Asset Quality: KBRA determined the asset quality based on the blended quality of the LPs’ credit quality and the equity risk of the distributions. This blended approach to derive the weighted average asset quality reflects the idiosyncratic nature of LP capital commitments and distributions to the Fund’s LPs, as well as the primarily investment grade LP base and the exposure to equity. Offsetting this asset quality determination is the asset base which would support the repayment of the Facility, as discussed in the asset coverage determinant.

Asset Coverage: Asset coverage is calculated assuming the maximum permitted Facility draw, in compliance with the covenants of the Facility Agreement. This asset coverage level is represented by taking the ratio of the most recently reported UCC of Eligible LPs plus the NAV to the estimated maximum financial indebtedness in line with the covenant of this Facility, which states that the ratio of the aggregate of UCC of the Eligible LPs and NAV is at least 3.00:1 to total financial indebtedness. Under these assumptions, Asset Coverage is greater than 300% for Crown Asia-Pacific Private Equity IV plc.

Liquidity: As the Fund makes investments, the principal source of collateral value and debt service shifts from the UCC (which is considered more liquid, with known contractual value and short time to fund) earlier in the Fund’s life to a greater reliance on the investment value of assets in the Fund itself (considered less liquid, with limited price transparency, greater complexity and uncertain realisation timing).

Duration: Duration has been determined based upon the remaining term of the Facility, maturing in December 2025.

Cash Flow Analysis: The primary source of repayment for subscription facilities consists of LP pledges to pay commitment amounts; the Lender is paid only when the LPs remit their payments. In any case, should an LP fail to pay, the LPA places the burden of payment on the remaining LPs on a pro rata basis. Therefore, KBRA analyses repayment capacity in the context of the quantitative determinants described above.

Qualitative Factors

Manager Review: LGT Capital Partners is an alternative investment specialist offering a wide range of investment programs focusing on private markets, liquid alternatives and multi-asset class solutions. The core team began investing in private markets in 1997, and in November 2000, they founded LGT Capital Partners, based in Pfaeffikon, Switzerland. As of September 2025, the Firm has approximately $110 billion in assets under management, with 16 offices across Switzerland, New York, Dublin, London, Vaduz, Paris, Frankfurt, The Hague, Luxembourg, Dubai, Beijing, Hong Kong, Tokyo, San Francisco and Sydney.

Other Qualitative Factors: There have been no changes to the Other Qualitative Factors assigned since issuance of the rating.

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Methodologies