News & Analysis as of

Credit Facilities

Mayer Brown

Understanding LPA Default Remedies

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A subscription credit facility is secured in part by the fund’s and its general partner’s (“GP”) right to call unfunded capital commitments from the fund’s investors, to receive capital contributions once funded and to...more

Mayer Brown

How California’s Climate Disclosure Law Impacts Lenders in Subscription Credit Facilities

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EXECUTIVE SUMMARY - As part of its Climate Accountability Package, California passed a law last year that creates disclosure requirements related to greenhouse gas (“GHG”) emissions for thousands of U.S. companies,...more

Mayer Brown

The Intersection of NAV and Margin Loans: Single Asset and Concentrated Asset Pools

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Executive Summary - Over the last several years, a need has arisen in the fund finance market, which caters to private equity, venture capital, family offices, and other investment funds (“Funds”) and their sponsors, for...more

Cadwalader, Wickersham & Taft LLP

Behind the Scenes August 2024 - Conditions Precedent: Borrower Deliverables

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

Mayer Brown

NAV Facilities: Appraisal and Valuation Challenge Rights

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EXECUTIVE SUMMARY - Net Asset Value ("NAV") credit facilities are lending arrangements underwritten on the borrower’s portfolio of investments, where the amount available for borrowing is based on the value of such...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

Subscription Agreements 101 – Back to Basics July 2024 - Subscription Agreements

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

Mayer Brown

Subscription Credit Facilities: Understanding Shared Blockers

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EXECUTIVE SUMMARY - Private equity structures often use “blockers” to achieve certain tax benefits. In this Legal Update, we explain what blockers are, how they may be used in a subscription credit facility, and what...more

Mayer Brown

Covered Transactions and Considerations in Fund Finance

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Section 23A and Super 23A can create additional complications for lenders in the fund finance market. Intended to protect the stability of financial institutions by restricting transactions with affiliates, Section 23A and...more

Mayer Brown

Subscription Finance: Fraud as an Exclusion Event

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EXECUTIVE SUMMARY - In the evolving landscape of the subscription credit facility market, the introduction of fraud allegations by an investor against a fund as a new exclusion event marks a pivotal shift....more

Goodwin

Subscription-Secured Credit Facilities: Recent Developments in the US Market and Considerations for Real Estate Funds

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Fund-level subscription-secured revolving lines of credit are a well-established instrument in the toolkits of a variety of private equity fund sponsors and managers, including for venture capital funds, hedge funds, debt...more

Mayer Brown

Implications of an Early Extension of a 364-day Credit Facility

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Because banks receive favorable capital treatment when a credit facility’s tenor is shorter than one year, lenders increasingly offer financing with 364-day tenors and uncommitted extension option terms of up to 364 days. In...more

Mayer Brown

HNW Feeder Funds: Considerations in Connection with a Subscription Credit Facility

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High net worth feeder funds (“HNW Feeder Funds”) have emerged as a strategic resource for private equity funds seeking additional sources of capital. The HNW Feeder Fund structure often involves a partnership between private...more

Mayer Brown

Subscription Credit Facilities: Considerations for Addressing Recallable Capital

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Recallable capital has become an increasingly common concept in subscription credit facilities. In this Legal Update, we explain the concept of recallable capital and its role in subscription credit facilities, as well as...more

Cadwalader, Wickersham & Taft LLP

Miami Bound: See You There February 2024 - Financing Management Fees

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

Goodwin

Fund Finance: 2023 Reflections and Looking Ahead to 2024

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Goodwin is proud to be a platinum sponsor of the 2024 Global Fund Finance Symposium. As next week’s conference approaches and our clients, colleagues, and friends head toward Miami, the Goodwin Fund Finance team has paused to...more

Goodwin

Ten Considerations for Large-Cap and Upper-Middle-Market Borrowers in Early Stages of Distress

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Companies continue to face economic uncertainty caused by a variety of factors such as high interest rates, changing consumer spending habits, a tight debt and equity environment, labor market and inflationary pressures,...more

Cadwalader, Wickersham & Taft LLP

Welcome to 2024: CWT’s European Fund Finance Market Insights - 2024 European Fund Finance Market Predictions

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

Latham & Watkins LLP

Hybrid Facilities: The Promise, the Reality and the Hope

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Have hybrid facilities evolved from a niche product into a full-fledged market? This article considers the features of subscription facilities, NAV facilities and hybrid facilities and explores why hybrid facilities have...more

Seward & Kissel LLP

Net Asset Value Credit Facilities: Key Issues And The Current Market

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Net asset value based credit facilities (“NAV Facilities”) are credit facilities pursuant to which the availability thereunder is based on the net asset value of the investments of the borrower, typically a private fund. The...more

Goodwin

Opening the Fund Finance Toolkit

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Recent years have seen significant growth and innovation in the fund finance industry — and, with an increase in the number and complexity of products in the market, it has become commonplace for industry publications and...more

Latham & Watkins LLP

After the IRA - A New Financing Landscape

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As we pass the first anniversary of the Inflation Reduction Act, the project finance markets are beginning to coalesce around novel financing structures designed to make optimal use of the new tax credit subsidies that the US...more

Latham & Watkins LLP

Kirschner v. JP Morgan: Second Circuit Affirms That Syndicated Loans Are Not Securities

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Second Circuit upholds SDNY’s finding that under Reves syndicated loans are not securities under federal law. Introduction - On August 24, 2023, the US Court of Appeals for the Second Circuit issued its highly...more

Cadwalader, Wickersham & Taft LLP

Challenge! The Lender’s Say on the V in NAV August 2023 - Valuation Challenge in NAV Facilities

In this article we look at the lender's right to challenge a sponsor’s valuation of their investments in the context of a NAV-backed financing. This right to challenge is a relatively recent development in these transactions,...more

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