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 scenario is common enough: following a slow quarter, a borrower misses a debt service coverage ratio (DSCR), fixed charge coverage ratio (FCCR), or other financial covenant test required under its revolving credit...more
This CLE webinar will explore the evolution of erroneous payment provisions in credit agreements as a result of the infamous Revlon case. The panel will review provisions developed by market participants, including language...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
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
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
When a borrower submits a request for borrowing in a syndicated credit facility, each lender in the lending group is generally obligated to make its pro rata share of the borrowing available to the administrative agent by a...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
“Call protection” (which you may also hear referred to variously as a “prepayment fee”, “prepayment premium”, “call premium”, “prepayment penalty”, “non‑call”, “hard call”, “soft call” or “make‑whole”) is a core economic term...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
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
The Fund Finance Association is excited to welcome attendees to the 12th Annual Global Fund Finance Symposium, which is rapidly approaching on February 8-10 at the Fontainebleau Hotel in Miami, Florida. We are pleased to...more
A promissory note, in its simplest form, is an instrument by which a Borrower (the Maker) acknowledges its obligation to repay the Lender (the Payee). Historically, Lenders required Borrowers to enter into both a credit...more
It’s that time of year again when conversations are dominated by reflections on our market’s performance over the last 12 months and expectations as to what 2023 will hold for our industry....more
A common yet contentious liability management strategy is an “uptier” transaction, where lenders holding a majority of loans or notes under a financing agreement seek to elevate or “roll-up” the priority of their debt above...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