News & Analysis as of

Collateral Lenders

DLA Piper

Ensuring Positive Outcomes With Negative Pledges in Venture Lending

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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

Cadwalader, Wickersham & Taft LLP

B(ack to School) September 2024 - Unlocking Liquidity With a Tranche B Facility

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

Cadwalader, Wickersham & Taft LLP

Going for Gold August 2024 - Credit Portfolio Finance – A Primer on Back-Leverage

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

Husch Blackwell LLP

Credit Risks Likely to Rise as 2024 Draws to a Close

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A strange confluence of geopolitical events, labor unrest, softening consumer demand, and supply-chain logistical issues could leave lumps of coal in the stockings of lenders this holiday season. The story begins in the Red...more

Balch & Bingham LLP

Alabama Enacts Uniform Commercial Receivership Act

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On May 15, 2024, Alabama became the thirteenth state to adopt a version of the Uniform Law Commission’s Uniform Commercial Real Estate Receiver Act (the “Act”). The Act seeks to bring more direction and clarity to...more

Cadwalader, Wickersham & Taft LLP

Different Yet Similar August 2024 - Borrowing Base/Coverage Ratio Approaches in Subscription Finance Facilities

The key component of any subscription credit facility is the underlying capital commitments that are pledged to secure the facility. Virtually every lender will require some level of over-collateralization – meaning, investor...more

Mayer Brown

NAV Credit Facilities: The Spectrum of Collateral Structures

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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

Cadwalader, Wickersham & Taft LLP

8th Annual European Fund Finance Symposium: The Latest From London May 2024 - Equity Commitment Letters – A Refresher

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

Proskauer Rose LLP

Understanding the Increasing Use of Holdco NAV Loan Structures

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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

Cadwalader, Wickersham & Taft LLP

Under Control March 2024 - How to Address Your Control Issues

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

Cadwalader, Wickersham & Taft LLP

Controlling Cash March 2024 - Cash Control Event: Lender and Borrower Considerations

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

Stark & Stark

Commercial Foreclosures in Pennsylvania: How Deal Formation Impacts Litigation

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The fact that commercial transactions can very easily become complex is not a novel statement. When financial institutions lend money to commercial entities, the basic documentation required to evidence the loan, promise to...more

Hahn Loeser & Parks LLP

Correcting the Past and Securing Your Future: What Title Insurance Endorsements Can Do for You

When it comes to risk mitigation for property investors, title insurance may be the best kept secret in the industry. While the concept of title insurance is well known and most investors understand the basic coverage offered...more

Mayer Brown

Subscription Finance: Commingling Collateral Accounts

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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

Cadwalader, Wickersham & Taft LLP

Taking Control August 2023 - Control or Control Agreement

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

Paul Hastings LLP

The Fixed/Floating Distinction: Either Fixing a Fixed Charge or Seeing that the Floating Charge Floats, Not in Between

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A lender’s decision between taking a fixed charge and taking a floating charge requires it to weigh a multitude of pros and cons. A fixed charge ranks ahead of an earlier floating charge that has not crystallized when the...more

Seward & Kissel LLP

[Hybrid Event] S&K Blockchain Symposium: Navigating the Storm - May 4th, New York, NY

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Please join Seward and Kissel's Blockchain & Cryptocurrency Group on Thursday, May 4, 2023 for the S&K Blockchain Symposium: Navigating the Storm. The event will feature multiple panels, with industry leaders who will...more

Miller Nash LLP

Why Does My Lender Want My Attorney to Send It an Opinion Letter?

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Although they have been around for many years, it is becoming more common for a commercial loan lender to require that the borrower’s counsel provide it with an opinion letter. At first blush, this may seem like an oddity:...more

Troutman Pepper

Bankruptcy Court Holds Title Holder Consent Is Enough to Give Collateral Rights to Debtor to Grant Liens

Troutman Pepper on

On April 28, the U.S. Bankruptcy Court for the N.D. of Oklahoma in Kirtley v. Mabrey Bank (In re Rudick) held that an entity other than the debtor may grant a lien on the debtor’s property, affirming the legal standard that...more

Cadwalader, Wickersham & Taft LLP

The ESG Factor, January 2022 - One of These Things Is Not Like the Other: New York State Court Upholds Commercial Reasonableness...

On November 10, 2021, the owner of the State Street Financial Center in Boston, Massachusetts defaulted on its debt, consisting of a mortgage loan in the amount of $535,000,000 and three mezzanine loans in the aggregate...more

A&O Shearman

The Scope of Article 8 Mandatory Choice-of-Law Rule

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The scope of the mandatory choice-of-law rule set forth in Uniform Commercial Code (UCC) section 8-110(a)(1), which provides that “the local law of the issuer’s jurisdiction . . . governs . . . the validity of a security,” is...more

Kaufman & Canoles

Commercial Real Estate Receiverships: The Closing of the Action and Miscellaneous Matters

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The sale order should require that the receiver file an accounting of its activities as receiver within so many days of the sale of the property. Once that has been filed, the secured lenders counsel can file a motion to...more

Lowenstein Sandler LLP

Get Ready For Loan Enforcement

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The pandemic has hurt many companies. Fortunately, at the urging of the Federal government and with relief from regulators, many secured lenders have refrained from taking action against borrowers in default under the terms...more

Amundsen Davis LLC

Cross Collateralization Generally Not Created By Note Alone

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From time to time, we review loan files for clients to confirm they have the collateral they think they do. Assume a lender has a properly perfected $1,000,000 mortgage loan and a $500,000 line of credit secured by all of the...more

Proskauer Rose LLP

Private Credit Lenders – Navigating Successor Liability Issues

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The primary investment thesis of a private credit lender is simple — get the loan repaid at maturity. Private credit lenders do not make loans as a means to acquire their borrower’s business. There are circumstances, however,...more

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