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
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
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
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
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
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
Following on Mike Mascia’s Closing Remarks delivered to young Fund Finance professionals at last month’s FFA University 1.0, I wanted to take things back to the basics for those who are just starting their careers in fund...more
When we think about parties to a subscription credit facility (the “Facility”), all eyes are generally on the fund and the general partner (the “GP”), but the investment manager (the “Manager”) is also a party to watch. For...more
In the days leading up to the closing of a credit facility, it is not uncommon for the administrative agent to ask each lender a simple question, “do you need a note?” For many lenders, the response is in the affirmative, but...more
For funds that are nearing the end of their investment period and have limited or no remaining unfunded capital commitments, the need to continue a subscription line facility for ongoing liquidity may continue to exist for...more
This was a busy week in the loan market. LIBOR transition is accelerating daily, we have a new form of credit agreement from the LSTA, and what has been deemed an “existential threat” to the syndicated loan market has reared...more
This article focuses on how private company and private fund interests are typically valued in NAV loan facilities and the increased focus we have seen lenders place on valuation issues since the beginning of the...more
For private investment funds with limited or no remaining uncalled commitments, net asset value (NAV) and hybrid credit facilities can provide a useful source of liquidity to support underperforming assets or allow funds to...more
As COVID-19 sends shockwaves through the global economy, many experts are predicting one of the deepest recessions in U.S. history. The hospitality, employment services, transportation, travel, leisure, mining, and oil...more
Uncertainty over the scope and spread of the COVID-19 outbreak continues to negatively impact the domestic and worldwide economy. Disruptions to business as a result of stay-at-home or shelter-in-place orders, restrictions on...more