Rating Action Commentary
ֳ Rates AXA IM InMotion RCF Fund II Subscription Facility 'AA+'/Stable
Wed 22 May, 2024 - 6:26 AM ET
Related Content:
AXA IM InMotion RCF Fund II Subscription Facility (Barclays' Participation)
ֳ - London - 22 May 2024: ֳ has assigned AXA IM InMotion RCF Fund II SCA SICAV-RAIF's (AXAIMRCF) subscription facility (Barclays Bank Ireland PLC's participation) an 'AA+' rating, with Stable Outlook. The facility, dated 12 January 2022, is secured primarily by the uncalled capital commitments of the underlying limited partners (LPs). The fund was launched in 2021 and is managed by AXA Investment Managers Paris.
ֳ's rating only addresses the credit risk of the subscription facility, and should not be viewed as an indicator of the fund's past or future performance, or its suitability as an investment for LPs. The rating only applies to Barclays' participation in the facility.
The borrowers under the facility are AXA IM InMotion RCF Fund II SCA, SICAV-RAIF, AXA IM InMotion RCF II S.a.r.l., and FCT AXA IM InMotion French RCF Fund 2.
KEY RATING DRIVERS
LP Pool Quality: The fund's investor base is fairly concentrated, consisting of 18 investors mainly in Europe, although they are of high quality. ֳ adjusted the rating assumptions for three LPs, representing 10.1% of uncalled capital commitments (UCC), who have side letters with provisions deemed negative by ֳ and/or who are investing through investment vehicles.
Quantitative Rating Indication (QRI): ֳ's baseline QRI is 'AAA', driven by the LP pool quality, an implied 62.3% maximum effective advance rate and a 12-month exposure period. The QRI indicated sufficient rating resilience to negative changes in the LP pool and therefore no further adjustments were made to the QRI.
Qualitative Assessment (QA): ֳ has assigned a QA score of '3' and as a result no notching was applied to the QRI. The QA score is supported by AXA IM's large scale and resources, the diversification and stability of the fund's assets, and strong fund terms. The score is also anchored by its fairly new strategy and small fund size, as well as sufficient economic incentives for LPs to meet future capital calls.
Caps and Limits: The facility rating is capped at 'AA+' as more than 20% of the LP base exposure is to unrated investors.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
- Increases in the share of underlying LP pool that is explicitly rated to above 80% could result in a removal of the rating cap and make the rating eligible for upgrade to 'AAA'. However, ֳ views this as unlikely given the current exposure to explicitly rated LPs
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
- Deterioration in the diversification or credit profile of the fund's LP pool that results in sustained lower baseline or adjusted QRIs than the QRIs relied on at the time of the most recent rating action
- Sustained deterioration in the fund's performance or underlying investments' value
- A material deterioration in the manager's investment and operational capabilities
Date of Relevant Committee
24 April 2024
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
Additional information is available on
PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer’s available public disclosure.
APPLICABLE CRITERIA
APPLICABLE MODELS
Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).
- Portfolio Credit Model, v2.16.2 (21 Jul 2023, 08 Jun 2023)
ADDITIONAL DISCLOSURES
ENDORSEMENT STATUS
| AXA IM INMOTION RCF FUND II SCA SICAV-RAIF | UK Issued, EU Endorsed |