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
When the U.S. Small Business Administration’s (“SBA’s”) revised rules for its Small Business Investment Company (“SBIC”) program went into effect last August, it looked like a greenfield market for capital call financing had...more
The primary purpose of a capital call facility is to provide bridge financing to a fund borrower that may be drawn upon, in lieu of calling capital, to make investments in accordance with the fund’s business purpose. In...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
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
In this week’s Fund Finance Friday, we will discuss the mechanics around an investor’s right to pre-fund all or a portion of its capital commitment (“Pre-Funding Investor”). In a subscription-based lending facility, a lender...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
2/14/2022
/ Borrowers ,
Credit Agreements ,
Credit Facilities ,
Financing ,
Investment Funds ,
Investment Management ,
Investment Portfolios ,
Investors ,
Lenders ,
Loans ,
NAV ,
Private Equity
Over the past few weeks, we have fielded a number of questions from our lender clients about a fund’s ability to call capital to repay a subscription credit facility after the expiration or termination of the commitment...more
As a way to increase the availability of uncalled capital and deploy additional capital for new and existing investments, limited partnership agreements will typically permit the general partner to recall proceeds from...more
Even though the market practice has shifted away from obtaining investor letters (“Investor Letters”) for many subscription-based credit facilities (“Facility”), Investor Letters continue to be an effective option to provide...more