Mezzanine Lending Video Series (Episode 1)
Advancing Agriculture: Security Interests and Article 9 Challenges (Part 1)
This Legal Update explores why, in order for an underlying loan to be included in a warehouse facility’s borrowing base, the underlying loan cannot be margin stock....more
Fine art was once regarded primarily as a cultural or emotional asset—meant to be displayed, appreciated, and eventually passed down through generations. But as the art market became increasingly sophisticated and intertwined...more
Many subscription credit facilities will provide for the issuance of letters of credit in addition to the funding of loans. A letter of credit is an irrevocable undertaking for the payment of money issued by a bank at the...more
Highlights: Stablecoins are likely to be characterized as general intangibles under the UCC of non-Article 12 states....more
There is a potentially expensive fee change on the horizon here in Alberta that may catch lenders and borrowers with large and/or multi-jurisdictional credit facilities unaware.This change will affect mortgages (collateral or...more
Subscription credit facilities usually require the ability to make, receive, and enforce capital calls on a pro rata basis, whether directly or indirectly through a cascading pledge structure, on 100% of the pool of capital...more
Equity Commitment Letters (ECL) are legal documents pursuant to which one party (typically the main fund or multiple funds managed by the sponsor) (the ECL Provider) commits to providing a certain amount of capital, usually...more
On September 19, 2024, the District Court for the Eastern District of New York dismissed claims against the mortgage lender, its mortgage servicer, and credit reporting agencies under the Fair Credit Reporting Act (FCRA), 15...more
Trade creditors are usually grouped with “general unsecured creditors” in bankruptcy, but some have liens that can elevate their claim priority. To achieve this, the lien must be properly granted and perfected under...more
As a lending lawyer for more than a quarter century at this point, I have seen that deposit accounts and deposit account control agreements are a routine component of virtually every transaction. Deposit accounts are a source...more
A “negative pledge” on intellectual property is a common feature of venture lending transactions, but its implications can often be misunderstood. Some lenders may be surprised to discover that it does not always provide the...more
Liquidity solutions are a topic du jour in fund finance. With bank balance sheets somewhat restricted by macroeconomic concerns and risk-weighted asset regulations, fund finance borrowers and lenders have sought creative ways...more
On July 9, 2024, the Consumer Financial Protection Bureau issued a consent order against a nationally chartered bank that, among other things, includes a number of allegations related to the bank's policies regarding...more
The combination of increased regulatory pressure and additional investor demand for higher yield has seen numerous banks gradually displaced by private debt funds in the corporate lending sector (particularly for mid-market...more
Executive Summary - Net Asset Value (“NAV”) credit facilities are a tool that borrowers may use to access financing based on the value of their underlying investment portfolio. The users of these facilities are generally...more
At the bottom of the stack in investment fund structures, there are generally “real” assets—things like equity interests in portfolio companies, mortgage loans, commercial receivables, maybe even bricks and mortar. Fund...more
On June 6, 2024 federal regulators published a final rule addressing Quality Control Standards for Automated Valuation Models. This was a collaborative rulemaking effort that included regulators from the Office of the...more
One of the best things about fund finance is that there is always something new and exciting happening in our space. New players come online, and new products and solutions solve issues that pave the way for fund borrowers to...more
We have recently seen a notable uptick in the usage of equity commitment letters (ECLs) in fund finance transactions and have been spending an increasing amount of time discussing their merits with our clients’ credit teams....more
While the market for NAV financings—loans to funds supported by the net asset value of their portfolios—grew in 2023 and continues to rapidly evolve, a consensus has developed around what is sometimes referred to as a “Holdco...more
One of the important components of the collateral package for a subscription finance facility is the lender’s perfected security interest in the fund’s bank deposit account into which the actual cash constituting the proceeds...more
Our readers have been blessed with wonderful Fund Finance Friday articles dealing with the maintenance of collateral accounts in 'When Deposits Don’t Travel with Loans', control over collateral accounts in 'Control or Control...more
For loans primarily secured by a cash flow stream, subscription facility lenders heavily depend on collateral accounts as a key element of the security package. In this Legal Update, we delve into why subscription facilities...more
1. Repos in the Islamic market - In our article titled "Repos in Islamic Finance"1 we concluded that Shari'ah-compliant repurchase transactions ("Repos") could play a useful role as a liquidity management instrument to...more
As most of our readers know, the majority of subscription facilities are secured by the right to call capital and receive capital contributions from the fund’s investors and the bank deposit account into which those capital...more