Cadwalader’s financial services team hosted Part 3 of its four-part series on capital relief trades earlier this week. You can access webinar replays here:
- Part 1: CRT Overview and Regulatory Capital Basics
- Part 2: Unpacking Regulation Q: CRT Structuring
- Part 3: U.S. Legal and Regulatory Considerations
Registration details on Part 4 will follow.
ANZ is seeking both a Director and an Associate Director of Research & Analysis to cover the Funds sector within its Financial Institutions Group.
As interest rates rise and a potential recession looms, we’ve seen a flight to quality as new entrants seek to participate in our fund finance market. While most deals on our books have just one lender and one fund as borrower, multi-lender facilities have historically provided outsized loan commitments. To wit: of the nearly 900 new deals and rebooking amendments our U.S. fund finance team did last year, only 8% were syndicated on initial close. Yet of the almost $200 billion of lender commitments in our U.S. portfolio during that time, almost two-thirds came from syndicated credit facilities. A significant part of that disparity comes from new lenders joining deals after origination. We expect that trend to continue. This article assesses the elements, issues and hot topics for bringing new lenders into a transaction from the perspective of the borrower, the administrative agent and the incoming lenders.
Bank earnings season kicks off in less than a week when three banks, all active fund finance lenders, report on July 14. Revenue growth has become more difficult to come by with mortgage originations slowing into rising rates, investment banking fees likely meaningfully lower, and asset management income also down due to declines in equity and fixed income prices.
The Fund Finance Association this week followed up on last week’s 6th Annual European Fund Finance Symposium requesting feedback via an event survey, available here. FFA additionally released an online version of the available slides from the Preqin presentation (click here) and an online copy of Global Legal Insights’ Fund Finance 2022 Edition (click here), as well as photos from the symposium (click here).
Private Funds CFO this week published an article coming off of the FFA’s European Fund Finance Symposium in London last week that covers the varying use cases by sponsors with NAV loan proceeds. The subscription-required article is accessible here.
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Private Funds CFO writes about the greater participation of private credit funds, insurance companies and other non-bank lenders in the fund finance market, pointing to a real-time poll taken during last week’s FFA European Fund Finance Symposium. The subscription-required article is accessible here.
ANZ is seeking both a Director and an Associate Director of Research & Analysis to cover the Funds sector within its Financial Institutions Group.
We have recently been fielding a number of questions from our lender clients on the application of certain investor side letter provisions on the collateral package that secures the repayment of a subscription credit facility. A typical collateral package for subscription credit facilities consists of the fund’s limited partners’ unfunded capital commitments, capital contribution proceeds, and the general partner’s right to call capital from the limited partners. It is common for investors to enter into side letters, which are separate written agreements with the fund which amend, supplement, and alter the terms of the investors’ rights and obligations under its limited partnership agreement with the fund. These changes agreed to by the fund in a side letter may have material implications on a lender’s subscription credit facility. Here we take a look at certain side letter provisions that impact a subscription credit facility, how these provisions operate, and how lenders look to mitigate the risks associated with the consequences of the side letter provisions.