We continue our focus this week on NAV loans, discussing common issues that arise in evaluating the security structures for such loans. For our purposes, NAV loans refer to loans to private equity funds where the value of the portfolio companies comprising the investment assets of the fund support the private equity fund borrower’s loan obligations. In other words, lenders are underwriting the value of the private equity fund borrower’s investments in its portfolio companies, as opposed to another asset of the fund (e.g., capital call rights).
In today’s video version of Fund Finance Friday: Industry Conversations, Mike Mascia of Cadwalader covers off the Fund Finance legal updates occurring over the past two weeks; Graham Bippart, the Editor at Private Funds CFO, who just completed a 10-part series on Subscription Facilities, discusses his funds finance research and writing; and Zac Barnett of Fund Finance Partners and Mike have a wide-ranging conversation about fund finance activity levels, the market segments where FFP is looking for lenders to finance prospective transactions, and their forecasts and predictions for the remainder of the year and beyond. Additionally, Whitney Namm Pollack, the Executive Director of Project Sunshine, discusses the great work her organization is doing to help hospitalized children and how FFA constituent firms can contribute.
Click “Read More” to watch!
On June 30, 2020, the Alternative Reference Rates Committee (“ARRC”) published recommendations regarding more robust fallback language for new originations of U.S. dollar-denominated syndicated business loans that reference LIBOR. The ARRC’s recommendations contain refreshed hardwired fallback language and an updated user’s guide regarding such hardwired language and potential drafting alternatives.
The enactment of the Cayman Islands Private Funds Law, 2020 (the “PF Law”) in February of this year presented some new hurdles for Cayman-organized investment vehicles looking to maintain compliance with the Cayman Islands Monetary Authority (“CIMA”). One such hurdle under the PF Law was the registration requirement for “Private Funds,” which was, until July 7, 2020, narrower in scope as to the types of Cayman entities required to register. The Cayman Islands Government has since amended the PF Law (“PFL Amendment”) to bring more Cayman entities within the scope of the “Private Funds” definition, increasing the number of entities obligated to register, as described in an article from Conyers.
Maples Group this week published a succinct update on the July 7th amendment to the Cayman Islands Private Funds Law, 2020, which amends the definition of "private funds" that are required to register with the Cayman Islands Monetary Authority and scopes certain additional entities within the definition.
Tune in on July 23 as Wildgen’s Michael Mbayi hosts the second installment of the new “Fund Finance” webinar series. The second installment will look to provide insight and analysis on the perspectives of the different parties in a fund finance transaction. Panel members include industry leaders Samantha Hutchinson (Cadwalader), Sally Little (ING), Danielle Roman (Mourant) and Sherri Snelson (White & Case).
Following last week’s series on the changing subscription credit market, Graham Bippart finds that constricted subscription credit supply, increased pricing and higher LIBOR floors may not be a momentary variation in “The shifting landscape for subscription credit” in Secondaries Investor.
This week, Private Debt Investor and Fried Frank discuss several options that funds might consider when looking to raise liquidity from the credit markets.
With the July 4th holiday in the States and many organizations taking Friday off, this week’s FFF is FFT.
Everyone anticipated a correction in the marketplace, but it’s fair to say that no one expected it to come in the form of a global pandemic. But here we are. For GPs – especially emerging managers – using a capital call line is a very effective tool to manage capital calls. Let’s explore how capital call lines (also known as subscription lines) can help and what to expect from a bank vis-à-vis capital call lines and a banking relationship in general.