KBRA Assigns Ratings to the Senior Loans, Mezzanine Loans, and Junior Loans Issued by Keys Investor II, LLC

KBRA assigns an 'A-' rating to the Senior Loans, 'BBB-' rating to the Mezzanine Loans and 'B-' rating to the Junior Loans (together, the "Rated Loans") issued by Keys Investor II, LLC (the "Issuer" or "SPV") legally owned and controlled by Oceanview US Holdings ("OVUSH"). The outlook on each class of Rated Loans is 'Stable'. The total issuance amount, inclusive of the Subordinated Notes, is $150.0 million, with initial advance rates of 55.5%, 73.0% and 90.0% for the Senior Loans, Mezzanine Loans, and Junior Loans, respectively.

The net proceeds of the transaction will be initially invested in an asset portfolio consisting of (1) limited partnership interests ("LP Interests") in Crown Liquidity Solutions Master S.C.Sp and (2) eligible investments in private credit loans. Distributions from the LP Interests and private credit loans are intended to fund capital calls and other fund obligations, expenses and interest on and repayment of the Rated Loans.

Key Credit Considerations

Asset Coverage

The Senior Loans have an initial Loan to Value (LTV) of 55.5%, equivalent to 181.2% asset coverage, the Mezzanine Loans an initial LTV of 73.0% or 137.0% asset coverage and the Junior Loans an initial LTV of 90.0% and asset coverage of 111.1%.

Transaction Structure

The transaction includes multiple tests and structural features which are listed below:

LTV Trigger: The Rated Loan lenders benefit from a blended LTV Test (from the end of the 4-year Re-Investment period), which accelerates cash sweeps to the Rated Loans to the extent the LTV on the Rated Loans exceeds the Targeted LTV for each class of the Rated Loans. The blended Targeted LTV is calculated as a weighted average LTV (by funded amounts) based on the value and concentration attributable to the Private Credit and CLS component. The active Targeted LTV is the greater of the blended calculation, or the CLS component alone. The Targeted LTVs for both the components decrease as the portfolio becomes more concentrated. To the extent these tests are breached, there can be no distributions 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 as per the respective steps of the Priority of Payments. The Targeted LTV is calculated on a pro forma basis to account for point in time distributions and the remaining value post the current payment period. While 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 than would otherwise be the case if valuations more closely resembled ultimate realizations.

Amortization Profile: During years 1-7 of the transaction, repayment of the Rated Loans is determined based on the aforementioned Targeted LTVs. Beginning in year 8, the Priority of Payments changes to sequentially repay the Rated Loans in full ahead of any distributions to the Subordinated Loans. Significant distributions ahead of year 8 will leave the Rated Loans exposed to a more concentrated portfolio, albeit at a lower absolute quantum of outstanding balances due to the Targeted LTVs.

Draw Mechanics: Both the Rated Loans and Subordinated Loans are available to be drawn over the life of the transaction. The Rated Loans will be drawn on a pro rata basis to meet investment needs until fully drawn; thereafter, any additional capital requirements will be funded by the Subordinated Loans. If the Rated Loans are not paid in full at their maturity, and there is remaining availability under the Subordinated Loans, the Issuer will call on the Subordinated Loans to repay the Rated Loans, thereby providing first-loss protection. This draw mechanic results in lower called subordination during the ramp-up period of the transaction and a higher interest burden compared to a traditional full pro rata draw structure. However, unless the Rated Loans are fully called, this structure increases the effective credit enhancement of the Rated Loans relative to a pure pro rata structure, as the full Subordinated Note balance remains available to support a partially drawn Rated Loan balance. As the Subordinated Notes serve as first loss protection, the credit quality of the sole equity holder, OVLAC, is a material consideration to the rating assigned to the Rated Loans. OVLAC has received an “A” Financial Strength rating and “a” Long-Term Issuer Credit Rating from A.M Best. KBRA have determined the credit quality of OVLAC is currently sufficient to support the ratings on the Rated Loans, however a deterioration in the credit quality may impact the assigned ratings.

Exposure to Interest Rate Risk: The Rated Loans will carry floating rate coupons. In the event of continued rising rates, the Issuer's borrowing cost will increase, further stressing the ability to fulfill interest and principal obligations due to holders of the Rated Loans. KBRA's cash flow analysis and the ratings assigned consider this risk, but notes the private credit component is majority floating loans which partially offsets this risk.

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.

Manager Review and Track Record

LGT Capital Partners (USA) Inc. (the “Manager”), which is a U.S. based registered investment advisor and part of LGT Capital Partners (“LGT CP”), which is ultimately beneficially owned by the Princely Family of Liechtenstein and currently employs 850+ professionals across 15 global offices with $110+ billion of assets under management (“AUM”). LGT CP advises the LGT Group Endowment (with $20+ billion AUM) which acts as a co-investor alongside LGT CP’s clients.

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 Rated Loan lenders & Subordinated Noteholder

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 Subordinated Loan lender as compared to, in KBRA’s view, were to decline relative to the current rating of Oceanview Life and Annuity Company.

Significant De-Leveraging 

A positive rating action may occur if there is significant de-leveraging of the Rated Loans, resulting in a reduction in LTV that exceeds forecasted or targeted levels.

Underlying Borrower Performance

A rating upgrade may occur if the overall weighted average credit quality of the underlying private credit borrowers increases over time relative to expectations at issuance.

This Press Release has been updated on February 2, 2026 to include certain information that is also found in the published Ratings Rationale Report relating to this transaction.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies