KBRA Affirms and Subsequently Withdraws the Rating Assigned to BNP Paribas' Participation in a Subscription Facility to Copenhagen Infrastructure V
13 Oct 2025 | London
KBRA UK (KBRA) affirms and subsequently withdraws the A rating assigned to BNP Paribas' €250 million participation in a €3 billion subscription facility to Copenhagen Infrastructure V (the “Fund”, "CI V"or the “Borrower”). The Facility matures in December 2025. The Fund is a continuation of the predecessor flagship funds (CI I, II, III and IV), focusing on greenfield investments in large-scale renewable energy infrastructure. The Fund will invest across technologies including contracted offshore wind, energy storage, onshore wind and solar. The rating action reflects the stable credit quality of the LP base, improved diversification of the LP base and stable performance of the Fund.
Key Credit Considerations
Financial Covenants and Structural Features: The primary collateral and source of repayment for the Facility is the uncalled committed capital ("UCC") of the Fund from the underlying limited partners (“LP”). On an ongoing basis, the Fund is required to maintain UCC in an amount equal to or greater than 1.50x of the aggregate amount of all Fund indebtedness, or 1.35x after 55% of eligible capital commitments have been called. A failure to remedy a breach of the covenant within the acceptable cure period will result in an event of default under the terms of the Facility Agreement. The Lenders have security over the rights of the GP to issue capital calls further to a continuing event of default. As of the most recent Compliance Certificate provided for August 2025, the Fund is in compliance with this financial covenant.
Alignment of Interests: A failure to fulfill 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 the (i) suspension of distributions to the defaulting LP; (ii) suspension of consent and voting rights; and (iii) selling all or any part of the defaulting LP’s interest. 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 LPs was evaluated using (i) for rated entities (approximately 44.6% 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, 61.2% of the Total Fund Commitments have been evaluated to be equivalent to investment grade credit quality, which remains largely in line with the last surveillance.
Diversification of LP Commitments: The diversification of the LPs’ commitments is measured using an adjusted Herfindahl-Hirschman Index (“adjusted HHI”). The Fund has received commitments from 186 investors, resulting in an adjusted HHI of 48.9, which indicates a relatively diverse LP base. This reflects an increase from the last surveillance review, when the Fund had commitments from 92 investors and an adjusted HHI of approximately 30.6.
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. At the current commitment level, the Facility requires indebtedness to be covered by at least 1.35x in uncalled commitments, noting 55% of eligible commitments have been called. As such, for the purposes of its analysis, KBRA has applied the 1.35x covenant threshold resulting in a minimum total asset coverage of 235.0%.
Liquidity: As the Fund makes investments, the principal source of collateral value and debt service shifts from the remaining capital commitments (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, subject to extensions.
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: Founded in 2012, Copenhagen Infrastructure Partners is a Danish investment firm specialising in greenfield renewable energy infrastructure. The Firm has a global portfolio of green energy projects, focusing on offshore wind, onshore wind and solar, energy storage, and other renewable technologies. As of September 2025, CIP manages 13 funds with approximately €33 billion in commitments from more than 200 institutional investors.
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