Last week, our colleague Amrita Maini published a succinct primer on overcall limitations (available here). Judging by the number of lender inquiries, we thought some data on their prevalence might be of interest. Based on the 252 fund finance facilities Cadwalader closed in the United States in 2017 and 2018, here’s a survey of overcall provisions by the numbers and—we couldn't resist it—a few gratis observations.
We received several additional job postings this week.
Ogier this week published a thought leadership piece titled “Subscription Finance Cayman Islands – Luxembourg Analysis.” The article does a terrific job of summarizing the key issues, particularly with regards to taking security, in both jurisdictions. A copy of the article is available here.
Here are some updates to our Fund Finance Calendar.
Overcall limitations limit a non-defaulting investor’s obligation to make up for any shortfall in funding caused by other investors defaulting. In the absence of such a limitation, each “non-defaulting” investor would be liable for up to the whole balance of its commitment to make good any such shortfall. Overcall limitations have become increasingly commonplace in fund documentation as investors often want to limit their obligation to compensate for any shortfall in funding caused by a default by a fellow investor.
The Bank of International Settlements (BIS) this week published a notable report on LIBOR replacement. No one can be blamed at this stage for fatigue on the topic, but the BIS report is nonetheless worth a read.
Global Legal Group this week published the third edition of Fund Finance 2019, widely referred to in the market as the “Pink Book.” The treatise includes 21 product-oriented chapters submitted by the most prominent law firms in fund finance, covering virtually every aspect of the market. It also includes jurisdictional updates for 22 countries, a helpful resource for brushing up on a new jurisdiction or selecting local counsel. Mike Mascia of Cadwalader is again the contributing editor. The treatise can be downloaded here and hard copies will be available at the Fund Finance Association’s Global Symposium later in the month (use Code GLIFF2019).
Cadwalader is hosting a cocktail reception at the 9th Annual Global Fund Finance Symposium in Miami. The event is scheduled for 8:00 p.m. (following the FFA’s welcome reception) and will be located at Scarpetta within the Fontainebleau Hotel. Significant others may join. To register, click here.
Brookfield buys a majority stake in Oaktree.
James Rock-Perring has joined Intertrust to establish a new fund finance advisory business.