KBRA Affirms and Publishes the Rating Assigned to ING Bank N.V., London Branch's Capital Call Facility to Crown Europe Small Buyouts V S.C.S.
8 Sep 2025 | Dublin
KBRA Europe (KBRA) affirms the AA- rating assigned to a revolving credit facility (the "Facility") provided by ING Bank N.V., London Branch ("ING") to Crown Europe Small Buyouts V S.C.S. (“CESB V” or the “Fund”). The Outlook is Stable. On 23 September 2024, KBRA assigned an AA- rating to the Facility on an unpublished basis. The rating has now been converted from unpublished to published. The rating was requested by ING.
The Facility is a €60 million bilateral revolving credit facility provided by ING, maturing in May 2026, with the option of extensions at Lender's discretion. The purpose of the Facility is for working capital, making investments, hedging, and other uses consistent with the Fund’s investment policies, as well as any other purpose permitted under the fund documents, excluding any use for distributions or redemption payments to LPs.
The rating action reflects the stable credit quality of the Limited Partner (LP) base and the stable performance of the Fund. The Fund reached its final close in August 2021, raising in aggregate of €600 million of commitments from 50 LPs. The credit quality of the LPs remains in line with rating issuance. As of March 2025, the Fund has called approximately 67.8% of LP commitments, up from 62.0% at rating issuance. In addition, the net asset value (NAV) of the Fund has increased from €392.5 million to €508.3 million year-on-year. KBRA views the combination of these factors as continued incentive for LPs to continue to meet future capital calls for repayment.
CESB V invests in primary private equity investments with a focus on small market buyout opportunities that have substantial business operations located in Europe. The Fund also invests in secondary private equity investments and co-investments on an opportunistic basis. LGT Capital Partners Ltd ("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 2025, LGT CP has more than $100 billion in assets under management, with offices across Switzerland, New York, Dublin, London, Vaduz, Paris, Frankfurt, The Hague, Luxembourg, Dubai, Beijing, Hong Kong, Tokyo, San Francisco and Sydney. LGT CP's team consist of over 880 professionals, who serve more than 700 institutional clients in 50 countries.
Key Credit Considerations
Investment fund ratings are based on quantitative and qualitative factors. The five key quantitative determinants are as follows:
- In the Asset Quality determinant, KBRA generally measures the quality of the collateral based on a weighted average scoring. For Subscription Facilities (“Sublines”), this includes an assessment using a matrix-based approach that reflects the creditworthiness of the Fund’s LP base.
- The Asset Coverage determinant measures the relative sufficiency of the pledged collateral value to repay the principal amount of the rated debt. For Sublines, this includes an evaluation of the covenants included in the Facility linked to uncalled committed capital (UCC) and NAV of the Fund, and/or advance rates applied to the UCC.
- The Liquidity determinant reflects KBRA’s assessment of the relative price discount that the underlying collateral may incur if the assets are subject to conversion into cash in order to meet scheduled or accelerated debt service requirements. Under the Liquidity determinant, KBRA considers three factors (type, complexity and price discovery / transparency) and scores these factors individually on a scale of zero to two, with two being the most liquid.
- In the Duration determinant, KBRA examines the tenor profile of the pledged collateral relative to the rated debt, and the associated vulnerability to changes in price of collateral over time.
- When appropriate, KBRA will perform a cash flow analysis in order to test the transaction’s ability to meet its rated interest and principal payment obligations under various economic, financial, and market scenarios. This is not applicable to Sublines, as LP capital calls typically occur on a non-periodic basis and the primary source of repayment for Sublines is the Fund’s UCC so once a capital call is issued, the LP is typically required to meet the capital call within a short window. Therefore, repayment capacity is analysed in the context of the prior rating determinants.
The above quantitative determinants produce a quantitative rating outcome. In addition to the above quantitative determinants, KBRA’s analysis considers a variety of qualitative factors, which can lead to upward or downward adjustments in the final rating outcome and these are assessed in the context of: (i) Manager Review; (ii) Legal Review, and (iii) Other Factors including alignment of interests, incentives to fund future capital calls and diversification within the LP base.
Rating Sensitivities
It should be noted that many aspects, including but not limited to, the rating sensitivities listed below, macroeconomic factors, market conditions, competitive landscape, and a fund manager’s investment acumen can impact the performance of the fund and influence KBRA’s rating decisions. If performance of the transaction differs meaningfully from the expected levels, KBRA may consider making a rating change.
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.
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