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KBRA Affirms Ratings Assigned to the Senior Loans, Mezzanine Loans, and Junior Loans Issued by Keys Investor III, LLC

5 Oct 2026   |   New York

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KBRA affirms the ratings assigned to the Senior Loans, Mezzanine Loans, and Junior Loans (together, the "Rated Loans") issued by Keys Investor III, LLC (the "Issuer"). The Outlook on all ratings is Stable. The Issuer is an entity legally owned and controlled by Oceanview US Holdings ("OVUSH"). The total commitment amount, inclusive of the Subordinated Loans, is $172.4 million of which $150.0 million was drawn at closing, with initial advance rates of 55.5%, 71.7%, and 87.0% for the Senior Loans, Mezzanine Loans, and Junior Loans, respectively.

The net proceeds of the transaction were invested in an asset portfolio consisting of limited partnership (LP) interests in ICG Core Private Equity Fund LP ("ICG CPE") and Coller Private Credit Secondaries (the "Coller Fund"). Distributions from the LP Interests are intended to fund capital calls and other fund obligations, expenses and interest on and repayment of the Rated Loans.

The rating action reflects the stable LTV metrics since issuance, plus that the composition of the underlying portfolio, the performance and composition of the underlying assets, as well as draws and repayment of the Rated Loans, have generally been consistent with expectations at issuance.

Key Credit Considerations

  • Asset Coverage: As of May 2026, the Senior, Mezzanine, and Junior Loans had LTV ratios of 53.2%, 69.1%, and 83.7%, respectively, corresponding to asset coverage ratios of 188.1%, 144.7%, and 119.4%. The LTV ratios were slightly lower than those at issuance, which were 55.5%, 71.7%, and 87.0% for the Senior Loans, Mezzanine Loans, and Junior Loans, respectively. Issuance LTV levels represent the maximum permitted LTVs under the blended LTV test described in the following section. The LTV is defined as the outstanding loan balance divided by the sum of the applicable NAV and uncalled Subordinated Loans (“Equity Commitment” or “Equity Interest”).
  • Transaction Structure: The transaction includes multiple tests and structural features which are listed below:
    • LTV Trigger: The Rated Loans lenders benefit from a blended LTV test, which accelerates cash sweeps to the Rated Loans when the LTV on the Rated Loans exceeds the target LTV for each class of Rated Loans. Stage 1 LTV thresholds are effective from Closing until the fourth anniversary following closing. Thereafter, Stages 2 through 4 will apply based on the concentration of the underlying fund components. The blended target LTV is calculated as a weighted average LTV (based on funded amounts), reflecting the value and concentration attributable to the Coller and ICG components. The applicable Targeted LTV on each Payment Date is equal to (i) the product of (x) the ICG Fund Component and (y) the ICG Fund Percentage plus (ii) the product of (x) the Coller Fund Component and (y) the Coller Fund Percentage. The target LTVs for both components decline as the portfolio becomes more concentrated. If these tests are breached, no distributions may be made to the Subordinated Loans, and all excess cash must be used to repay the Rated Loans in sequential order of priority until the LTV tests have been cured, in accordance with the respective steps of the Priority of Payments. The target LTV is calculated on a pro forma basis to reflect point-in-time distributions and the remaining portfolio value after the current payment period. While considered a credit-positive, this test is highly sensitive to the accuracy of the portfolio valuation and could potentially allow for greater distributions to the Subordinated Loans if valuations are overstated relative to the ultimate realizable values.
    • Amortization Profile: During the first stage of the transaction, repayment of the Rated Loans is determined based on the aforementioned targeted LTVs. Beginning in the second stage following the 11th anniversary from Closing, the Priority of Payments changes to repay the Rated Loans in full ahead of any distributions to the Subordinated Loans.
    • Cash Sweep Mechanics: Provisions require excess cash to be applied to cure LTV breaches, to redeem fund interests if LTV exceeds 95% during the first stage of the transaction, and, thereafter, to submit full redemption requests (subject to NAV conditions). These mechanics operate as cash sweeps rather than hard prepayment obligations, mitigating refinancing and tail-end risk by enforcing deleveraging when leverage metrics deteriorate.
    • Draw Mechanics: If the Rated Loans are not paid in full at maturity, one year prior, or the NAV of the Issuer is less than or equal to zero, the Issuer will draw on the Subordinated Loans, subject to remaining availability, to cover the shortfall. Since the Subordinated Loans provide first loss protection, the credit quality of the sole equity holder, OVLAC, is a material consideration to the rating assigned to the Rated Loans. KBRA has determined the credit quality of OVLAC is currently sufficient to support the ratings on the Rated Loans, however, a deterioration in its credit quality may impact the assigned ratings.
    • Exposure to Interest Rate Risk: The Rated Loans carry floating rate coupons. In the event of persistently elevated interest rates, the Issuer's borrowing cost will increase, further stressing its ability to fulfill interest and principal obligations on the Rated Loans. KBRA's cash flow analysis and the assigned ratings consider this risk. However, the private credit component is predominantly composed of floating loans, which provides a partial offset.
  • Evolving Portfolio of Private Asset Collateral: Since the Issuer’s asset commitments will ramp up over time, the ultimate composition of the collateral supporting the repayment of the Rated Loans could vary due to performance or the timing and amount of actual capital called. KBRA evaluated a range of cash flow scenarios, which incorporate potential variability in performance outcomes.
  • Interest Deferral & Headroom: Subject to pro forma compliance with the LTV tests, additional commitments under the Senior or Mezzanine Loans, beyond those called at closing, may be drawn to cover interest payments on the Senior and Mezzanine Loans. This mechanism requires NAV appreciation such that there is de-leveraging of the Rated Loans to draw back to the initial advance rates. Once this headroom is exhausted, interest on the Rated Loans will be deferred if timely payment is not possible. The Senior Loans are also subject to a limit on the number of Deferred Interest periods permitted. Any deferral beyond eight consecutive payment dates or more than 16 payment dates in total over the life of the transaction, constitutes an Event of Default (EoD). In scenarios where NAV does not appreciate, liquidity pressures may arise, resulting in interest shortfalls. Mitigating factors include income generated by the Coller Fund and the Manager’s ability to submit redemption requests for the LP interest during the first stage of the transaction.
  • Manager Review and Track Record: Coller EQT’s secondaries strategy builds on the experience and institutional capabilities created by Coller Capital (the “Firm”), over more than 30 years through its flagship Funds. The Firm has been investing in secondary opportunities for over 30 years, with $55 billion of assets under management (AUM) and a team of 326 professionals globally as of March 2026. On August 31, 2026, EQT completed its acquisition of Coller Capital, and the firm’s investment and origination processes will remain independent. KBRA will continue to monitor any potential impacts post-acquisition. ICG (LSE: ICG) is a global alternative asset manager with $126bn in AUM as of June 2026 and more than three decades of experience. ICG operates from over 20 locations globally and invests client capital across Structured Capital; Private Equity Secondaries; Private Debt; Liquid Credit; and Real Assets. ICG’s secondaries platform is comprised of specialized teams and strategies dedicated to LP-led and GP-led secondaries, respectively. The firm collectively manages over $23 billion across its secondary strategies, co-investment vehicles, and separately managed accounts, $2.6 billion of which is managed by the Private Equity Fund Investment (“PEFI”) team. ICG’s secondary teams have a track record of executing secondary transactions through multiple economic cycles. ICG has been listed on the London Stock Exchange since 1994.

Rating Sensitivities

  • Significant Underperformance of Fund Assets or Reductions of Forecasted Distributions: Significant or sustained deterioration in portfolio valuation or trend of collateral cash flows that are notably lower than current forecasted performance may result in a negative rating change.
  • Credit Profile of the Equity Commitment Provider: Given the transaction’s reliance on the structure to continue to fund through the transaction life, KBRA may consider a downward ratings revision if the credit quality of the Equity Commitment provider were to deteriorate.
  • Changes in Asset Coverage: A rating upgrade may occur if the structure de-levers and asset coverage increase more than expected, coupled with stable asset performance. Conversely, a rating downgrade may occur if asset coverage has decreased resulting from asset underperformance.

To access ratings and relevant documents, click here.

Click here to view the report.

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.

This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union and by Kroll Bond Rating Agency UK Limited for use in the UK. Information on a credit rating’s endorsement status is available on its rating page at KBRA.com.

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.

The rated entity is, or has a relationship with, one or more of KBRA Europe/KBRA UK shareholders that is required to be disclosed under applicable credit rating agency regulation in the EU and/or the UK. Please review KBRA's shareholder disclosures, which are updated periodically.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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