Cadwalader’s London Fund Finance team has bolstered its senior talent and NAV and sub-line capacity with two recent strategic hires. The team, which is now one of the largest law firm teams in Europe dedicated solely to fund finance, is pleased to welcome on board these new team members and to introduce them to you.
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Anika Rahman recently joined the Fund Finance team as an Associate, having previously worked for an international law firm and as in-house counsel for a global investment bank in its fund finance team. Anika has extensive experience across the full range of fund finance products, from subscription line, NAV, hybrid, umbrella and GP line facilities to some of the largest syndicated financings in the market. |
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Tom Spinks joined the Fund Finance team as an Associate from an international law firm. Tom’s experience covers a diverse range of fund finance products, with a particular focus on infrastructure funds. Tom has more than ten years’ experience advising some of the largest European infrastructure funds and their lenders on all aspects of their funding requirements. |
Our topic today is breakage costs (also called “break funding” costs) in your new SOFR credit agreements. Someone in the market recently asked: “I have a friend (OK, it’s me) who’s negotiating a credit agreement. We received comments regarding the old LIBOR break funding provisions. How do I explain what’s relevant in our new SOFR-only world?” The short answer to your friend is that both Term SOFR and Daily Simple SOFR may have breakage costs (although the breakage costs for an overnight rate like Daily Simple SOFR would likely be less than the breakage costs for Term SOFR, which is a tenored rate).
The Russian invasion of Ukraine brought sanctions to the forefront in the past week, with significant compliance implications for financial institutions and a minor update to fund finance credit agreements. Specifically, the “Sanctioned Country” defined term in our form credit agreements has been updated to include the regions referred to as the Donetsk People’s Republic and the Luhansk People’s Republic, formal recognition of which by Moscow triggered the application of comprehensive territorial sanctions earlier this week. The real work, as Cadwalader’s James Treanor points out in a Law360 article yesterday, will be the internal processes at financial institutions to identify and stop processing prohibited transactions involving newly sanctioned Russian banks and other entities and individuals targeted by the United States and other countries.
The FFA brought together over 800 investors, fund managers, bankers and lawyers for the 11th Annual Global Fund Finance Symposium last week in Miami. To kick off the final day of the conference, Natasha Puri (Lloyds Bank) was joined by Sekou Kaalund (JPMorgan’s Corporate and Investment Bank) for a keynote discussion on Diversity in Fund Finance.
Real Deals published an article in which Investec’s Helen Griffiths and Oliver Bartholomew discuss key structural developments for capital call facilities, including cost savings awarded by the master facility agreement, the importance of GP credit ratings, and continuation vehicle solutions. To view a preview or access the full subscription-based article, click here.
Follow this link to read up on Ropes & Gray’s key takeaways from the Fund Finance Association’s 11th Annual Global Fund Finance Symposium in Miami, where market participants gathered to discuss the latest developments in global fund finance and to consider the outlook for the industry in 2022 and beyond.
The 11th Annual Global Fund Finance Symposium just wrapped up in Miami, and what an event it has been.
Cadwalader partner Tim Hicks participated on the Symposium panel titled, “Underwriting and Due Diligence Lessons Learned,” which focused on best practices for completing due diligence in the wake of recent developments in the market and COVID-19. Others on the panel were Keenan McBride, an Executive Director at Morgan Stanley; Michael O’Connor, a Partner at Conyers; Brent Shultz, a Partner at Haynes and Boone who served as moderator; Guy Simpson, the Head of Equity Fund Resources at Bridge Bank; and Storey Whalen, a Director at First Republic. The key takeaway from the discussion was that recent litigation has caused lenders to reevaluate their due diligence processes, and some lenders have implemented additional safeguards in terms of independent verification of investor commitments. However, the market has not made any drastic changes for a product with an incredibly strong track record of performance.
The Thursday afternoon panel on “Hot Topics in Fund Finance” was chock full of interesting insight on the latest trends in our industry. Subjects included ESG, rated note feeders, continued LIBOR transition and the competition for talent in the market.
There has been an evolution of the private equity secondaries market.