Confidentiality provisions in subscription credit facilities have always served a central purpose – protecting sensitive fund and investor information. These provisions have grown more detailed, more prescriptive, and, for...more
Before a subscription lender can enter into a subscription credit facility with a fund, the subscription lender will need to review the limited partnership agreement (“LPA”) of such fund to confirm the LPA allows for...more
Fund finance is and always has been by nature a cross border enterprise. While there are a number of lenders that we represent in the United States that lend to funds exclusively organized in the U.S.– typically in Delaware –...more
In entering into a fund financing, both the Lender and the Fund have expectations that the relationship will be a success. The Lender is appreciative of the association, and the Fund is confident in its ability to raise...more
The credit agreement for a subscription credit facility will list several conditions precedent that are required prior to the credit agreement becoming effective and/or the first extension of credit occurring thereunder....more
We have said it before – the “credit cornerstone” of a subscription credit facility is the limited partnership agreement (the “LPA”) – it is the primary contract, together with any side letters, governing the relationship...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
About a year ago, we published “Term Loan Solutions in Fund Finance,” which ended up being a popular article on Fund Finance Friday. Since then we have seen lenders, sponsors, law firms and rating agencies become more...more
With new banking rules on the horizon for financial institutions, lenders are looking for new strategies to bolster lending capacity and accommodate debt issuances. One such option is term debt....more
The year 2023 presented the fund finance industry with many challenges that it rose to face with an inventiveness and rigour that showed just how mature and multi-faceted the market has become. At Cadwalader in London we saw...more
Recallable capital is a hot topic these days in both subscription financing and NAV financing transactions, both at industry events and in the press. There has been a good deal of attention to this concept in the NAV market...more
As noted in Angie Batterson’s wonderful panel at our Finance Forum in Charlotte last month, the term NAV loan means different things to different people, and can encompass a diverse mix of structures and asset classes in the...more
Here’s what we’re reading these days. Less than half of private credit borrowers would generate positive free cash flow in a mild stress scenario, according to a recent analysis by S&P Global Ratings that reviewed more...more
With the recent downgrades issued to several banks by Moody’s and S&P in August, as well as the recent banking turmoil which occurred earlier this year, and the flurry of assignment activity in the market, lenders and...more
This past weekend officially marked the end of summer in the U.S. as vacations and Labor Day gatherings have come and gone, and the kids are now back in school. And while I anticipate that everyone’s in-office attendance will...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
A fund is a living, breathing organism that aims to achieve much more than being a vessel for a subscription credit facility. The limited partnership agreement (“LPA”) of the fund may have to be amended, restated,...more
A search of the term “discretion” in virtually any credit agreement will yield numerous results. It is the word or words preceding that result that often is a point of much consternation. Many borrowers prefer the use of...more
After leaving South Dakota and taking on a full tank of gas in Tennessee last week, today we have our biggest prize in our 50-state road trip of sovereign immunity: Texas. It’s our luck to be your driver for this leg of the...more
Guaranties are a common feature in fund finance transactions. Particularly in NAV loans, upstream and affiliate (or “sideways”) guaranties are used. Below we discuss some of the context for the use of these types of...more
As leveraged loan markets have been impacted by a challenging macroeconomic environment, private equity sponsors are sharpening their focus on flexibility in their portfolio companies’ loan documents Given the sharp...more
During times of market disruption and economic uncertainty, the representations and covenants set forth in a credit agreement play an even more important role in the ongoing relationship among the loan parties and lenders....more
The past six months have been turbulent in the fund finance world. We have seen lenders in the market deal with significant capital constraints, we have seen a small amount of lenders scale back in the fund finance lending...more
Against the backdrop of a changing landscape of fund finance providers and products, this session made for an insightful discussion of the challenges and opportunities our market faces. On the panel were Ana Arsov (Managing...more
The 2023 edition of the Fund Finance Association’s annual conference was again filled with interesting insights from a wide range of industry participants and leaders. The panel titled “Market Evolution & Industry...more