On September 23, 2024, the Delaware Supreme Court affirmed a lower court’s ruling that Byju’s Alpha, Inc. was in default under the terms of a credit agreement for a $1.2 billion loan and that the lenders had authority under...more
I recently had the opportunity to present during a Strafford CLE webinar on strategies for mitigating the risks of lender liability claims when reworking troubled commercial real estate loans. A central theme throughout the...more
When negotiating credit agreements, lenders will focus on how to maximize the prospect of their loan being repaid in full at maturity...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 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
Our Distressed Debt & Claims Trading Team discusses trading issues related to DQ provisions in broadly syndicated credit facilities and trends providing borrower/sponsor friendly terms creating potential pitfalls for...more
We have been following the litigation over the question of whether certain syndicated loans are securities. Kirschner v. JPMorgan Chase Bank, N.A., which has been before New York federal courts for years, is now before the...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
Recently, in In re Moon Group Inc., a bankruptcy court said no, but the district court, which has agreed to review the decision on an interlocutory appeal, seems far less sure. The bankruptcy court held that a lockbox...more
In this issue of Davies Insolvency Now, against a backdrop of rising inflation and interest rates, we take a deep dive into the legislation that regulates rates of interest in Canada, drawing on recent court decisions to help...more
A search of the term “discretion” in virtually any credit agreement will yield numerous results. It is the word or words preceding that result that often is a point of much consternation. Many borrowers prefer the use of...more
The ruling, which held that the transaction did not violate the implied covenant of good faith and fair dealing, highlights the importance of carefully drafting lending documents. On June 6, 2023, Judge David Jones of the...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