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When the U.S. Small Business Administration’s revised rules for its Small Business Investment Company program went into effect last August, it looked like a greenfield market for capital call financing had been opened. For the first time, the agency permitted capital call financing to levered SBICs without requiring SBA pre-approval. Given that the 298 active SBICs manage more than $40 billion in AUM and hold more than $10 billion in unfunded commitments, the opportunity looked rather compelling. But for reasons that we expand on here, limitations the collateral package and lender remedies may lead lenders to treat SBIC capital call lines more like a low advance-rate, unsecured product (with certain enhancements) and less like traditional subscription line of credit.
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NAV loans are getting constant coverage in the press now. For those of us that spent years trying to direct focus to the potential of NAV lending, this is a welcome development. Admittedly, not all of the coverage is positive. It seems that there is a new article out every week with a negative take on NAV. As a result, we’ve been receiving a lot of calls from clients asking questions about the status and trajectory of the NAV loan market. We welcome the attention, positive and negative. A discussion on the merits of NAV lending is warranted, and the positives will, over time, win out over perceived negatives. In the meantime, we continue to see robust NAV loan activity, and we remain unequivocally bullish on this segment of the fund finance market. Let’s recount some of the reasons why:
If you’re planning that summer road trip or flight, maybe now is the time to line up the listening material. We surveyed our team for the best fund finance related podcasts, and here’s what we came up with. Let us know if you have favorites that should be added to the list.
The Fund Finance Association invites you to join them at an exclusive gathering of fund finance stakeholders in Luxembourg, showcasing the latest fund finance trends and introducing the activities of the FFA Diversity Committee.
In the first of our series “ESG in Fund Finance” articles, we summarise and examine the recent publication “A Guide to the Application of Sustainability-linked Loan Principles in Fund Finance” . . .
Cadwalader partner Angie Batterson and associate Ryan Leverone were extensively quoted for a story, “Sponsors Seek Unique Revolver Control,” which appeared in the March 28 edition of LSEG LPC, the publication of the London Stock Exchange.
Cadwalader partner Wes Misson has been named a 2024 “Leader in the Law” by North Carolina Lawyers Weekly.
We are very pleased to announce Fund Finance Senior Associate Olivia Stewart has returned to Cadwalader.
Olivia represents banks and financial institutions as lenders and lead agents in structuring, negotiating and documenting subscription credit facilities for private equity funds.
Olivia received her J.D. from the University of South Carolina School of Law, where she served as Editor in Chief of the South Carolina Law Review and was elected as a member of the Order of the Coif. She received her B.A. from Roanoke College in political science with a concentration in legal studies.
Welcome back, Olivia!
Women in Fund Finance (NYC), NextGen Americas and Moody's are delighted to invite you to a panel discussion on AI's transformative role in finance.