KBRA Affirms and Subsequently Withdraws the Rating Assigned to a Subscription Facility provided by BNP Paribas to Crown Co-Investment Opportunities III Master SCSp
26 May 2026 | London
KBRA UK (KBRA) affirms and subsequently withdraws the AA- rating assigned to a subscription facility to Crown Co-Investment Opportunities III Master SCSp ("CCO III", the "Fund", or the "Borrower"), provided by BNP Paribas ("BNPP" or the "Lender"). The rating and withdrawal were requested by BNPP. The rating action reflects the stable credit quality of the LP base and stable Fund performance since previous surveillance.
The Facility is a bilateral, multi-currency $150 million facility which can be increased via an uncommitted accordion up to a maximum Facility size of $300 million at the Lender's discretion. In April 2026, the Facility was extended by one year to April 2027 and reduced from $185 million to $150 million, with further extensions subject to Lender's consent. The Facility is scheduled to reduce further from $150 million to $130 million in October 2026. The purpose of the Facility is for working capital, making investments, hedging, fees and other uses consistent with the Fund's investment policies and as otherwise permitted under the fund documents.
The Fund is the the third vintage of LGT Capital Partner’s ("LGT CP") co-investment strategy, focusing on buyouts in North America, Europe and opportunistically in Asia-Pacific. LGT CP 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 CP, based in Pfaeffikon, Switzerland. As of January 2026, LGT CP has more than $110 billion in assets under management, with offices in Switzerland, New York, Dublin,London, Vaduz, Paris, Frankfurt, The Hague, Luxembourg, Dubai, Beijing, Hong Kong, Tokyo, Singapore, San Francisco and Sydney. LGT CP's international team of over 900 professionals serves more than 700 institutional clients in 50 countries.
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 LPs. The Borrower is required to maintain UCC from the Included LPs in an amount equal to or greater than 150% of the aggregate amount of all Fund Indebtedness, which steps down to 130% once 65% of capital commitments have been called. The Facility is also subject to a net asset value (NAV) Ratio covenant, requiring that the ratio of (a) the aggregate of (i) the UCC of the Included LPs and (ii) NAV of the Borrower to (b) total Financial Indebtedness must be greater than 250%. There is a 10-business day cure period for a breach of these financial covenants, following which it triggers an Event of Default. The Lenders also have security over the rights of the general partner (“GP”) or Manager to issue capital calls further to a continuing Event of Default. As of the most recent information provided by BNPP as of December 2025, the Borrower is in compliance with these financial covenants.
Alignment of Interests: A failure to fulfil a capital call can result in the defaulting LPs 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) causing the income and capital accounts of the defaulting LPs to be forfeited; (ii) offering whole or part of the defaulting LPs’ interest; and (iii) suspending distributions to the defaulting LPs. These provisions are strong incentives for LPs to meet capital calls.
Credit Quality of LP Commitments: KBRA assessed the credit quality of the LPs comprising the Fund was evaluated using (i) for rated entities, the ratings assigned to the relevant investor 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 investor's credit quality. Overall, the credit quality of the LP base remains broadly in line with the previous surveillance.
Diversification of LP Commitments: The diversification of the LPs’ commitments is determined utilising an adjusted Herfindahl-Hirschman Index (“adjusted HHI”). The diversification of the LP base remains broadly in line with the 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 Lenders 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.
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 assumes the maximum Facility draw permitted to remain in compliance with the financial covenants of the Facility. KBRA determined asset coverage by calculating the ratio of the total UCC plus the Fund’s NAV to the total financial indebtedness. Under these assumptions, the asset coverage is greater than 300%, representing significant asset coverage, and this has increased since previous surveillance due to growth in Fund’s NAV and the reduction in the maximum size of the Facility.
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 April 2027, subject to further 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 Limited Partnership Agreement 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 CP 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 CP, based in Pfaeffikon, Switzerland. As of January 2026, LGT CP has more than $110 billion in assets under management, with offices in Switzerland, New York, Dublin,London, Vaduz, Paris, Frankfurt, The Hague, Luxembourg, Dubai, Beijing, Hong Kong, Tokyo, Singapore, San Francisco and Sydney. LGT CP's international team of over 900 professionals serves more than 700 institutional clients in 50 countries.
Other Qualitative Factors: There have not been any changes since the previous surveillance.
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