KBRA Affirms and Subsequently Withdraws the Rating Assigned to BNP Paribas' Participation in a Subscription Facility to Various Partnerships Managed by Advent International
14 Oct 2025 | London
KBRA UK (KBRA) affirms and subsequently withdraws the A rating to BNP Paribas' $350 million participation in a $6 billion subscription facility (the "Facility") to various partnerships managed by Advent International (the "Manager"), including Advent International GPE IX (“GPE IX”), Advent International GPE X (“GPE X”), Advent Global Technology II (“AGT II”), and Advent Latin American PE Fund VII (“LAPEF”). The rating and withdrawal were requested by BNP Paribas.
The Facility originally closed in May 2022 for $5 billion and was upsized in May 2025 to $6 billion, with an additional $2 billion uncommitted accordion option subject to lender consent. As part of the amendment, the Facility’s maturity was extended by three years to May 2028 and includes two further one-year extension options. The Facility operates under an umbrella structure for various Funds managed by Advent International and as part of the amendment, Advent Global Technology I was removed from the structure while Advent anticipates adding further Funds into the Facility over the next 12–18 months. The rating action reflects the stable credit quality of the LP bases and stable performance of the Funds under this umbrella structure since rating issuance.
Key Credit Considerations
Asser Coverage: Availability under the Facility is determined by the applicable advance rate applied to the uncalled capital commitments (“UCC”) of limited partners (“LPs”) based on their classification. The Available Commitment is the lesser of: (i) the sub-Facility limit of the Fund and (ii) the Borrowing Base for each Fund Group.
No Cross Collateralisation Among Fund Groups: The obligations of the partnerships within each Fund Group of the Facility are joint and several, and are secured by the LP commitments of that Fund. There is no cross-collateralisation or cross-default across Funds. To manage borrowing at the individual Fund level, the Facility Agreement includes sub-limits that cap the indebtedness of each Fund acceding to the agreement. Furthermore, the advance rate for each Fund is determined by the LP base of that Fund, with rates varying according to investor type and LP concentration. As a result, Funds with weaker or more concentrated investor bases benefit from lower advance rates.
Alignment of Interests: A failure to fulfill a capital call can result in the loss of rights to distributions from the Funds as well as the potential to be restricted from investing in future private capital opportunities. Furthermore, in the event an LP defaults in 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 the defaulting LP’s drawable commitments due and payable; (ii) suspension of distributions to the 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.
Quality of LP Commitments: KBRA assessed the credit quality of the LPs comprising the Fund. KBRA’s assessment of the credit quality of the LPs was evaluated using (i) for rated entities, 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. The eligible investor bases consists of institutional investors, including public and private pension funds, insurance companies, sovereign wealth funds, investment funds, endowments and high net worth individuals in Europe, the U.S., Latin America, Asia, Australia and the Middle East. There are no material changes to the LP base since last surveillance.
LP Diversification: The diversification of the LPs’ commitments is determined utilising an adjusted Herfindahl-Hirschman Index (“adjusted HHI”). The diversification of the LP commitments across the sub-Funds remains in line with that at last surveillance, with more than 1,900 LPs.
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 Assets or Investments: A decrease in the Fund’s NAV due to underperformance of the Fund’s underlying assets or 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 below.
Asset Coverage: The asset coverage calculation assumes the maximum Facility draw permitted in compliance with the financial covenants. The asset coverage per Fund is calculated by its applicable advance rate as determined by the makeup of the LP base. There are different advance rates for types of investors as well as concentration limits that restrict the maximum amount of debit reliance per investor which results in a different advance rate for each Fund under the Facility. The asset coverage is represented by the maximum Facility commitment for each Fund divided by its respective advance rate. In each case, KBRA has assumed the maximum amount is drawn and invested into the Fund, resulting in potential asset coverage equal to the maximum advance rate plus the assumed maximum full draw on the Facility. This amount is then divided by the maximum advance rate to calculate the asset coverage per Fund.
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 on the remaining term of the Facility, maturing in May 2028, 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 1984, Advent International is a global private equity firm headquartered in Boston, Massachusetts. The Manager focuses on investments across five core sectors: business and financial services, health care, industrial, consumer, and technology. Advent’s investment strategy is centered on international investing, partnering with management teams, and acquiring majority shareholding positions. As of June 2025, Advent manages approximately $100 billion in assets under management.
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