This is the second in a two-part series on waterfalls in syndicated and private credit. This Legal Update examines how the waterfalls distribute value among competing creditor classes and security...
The standard Day-1 Equity commitment structure works well for vertical strip rated note feeders (“RNFs”), but it can disrupt the negotiated tranche waterfall in horizontal strip structures. This Legal Update proposes a preferred equity alternative that preserves investor priority, maintains ratings neutrality, and provides lenders with an enforceable, borrowing base-eligible commitment (“Day-1 Pref”).
Because collateralized fund obligations ("CFOs") can be customized to the unique needs of both funds and investors, those needs will impact the process and timing of the transaction. This Legal...
CFOs have become an increasingly popular alternative investment vehicle. They offer a way for portfolio investors, secondary funds, and funds of funds to layer their investment strategy with investments that...
One of the hottest fund finance trends is an alternative investment vehicle that has become increasingly popular. A close sibling of collateralized debt obligations ("CDOs"), collateralized fund obligations ("CFOs") are...
On February 11, Mayer Brown’s cross-practice team delivered a webinar on the use of rated note feeders to optimize risk based capital treatment for insurance company investors. Presentation Slides
Due to their long-term investment horizons, US insurance companies historically have been significant investors in alternative assets such as private equity and private credit funds. More recently, making investments in...
Collateralized fund obligations (“CFOs”) have garnered attention recently, becoming increasingly popular within the fund finance market as a way to generate liquidity. CFOs have several benefits, as we explained in...
Insurance company investors are increasingly looking to invest in private equity and similar private investment funds via debt capital commitments (as opposed to traditional equity capital commitments) to take advantage...
Subscription-backed credit facilities (also known as “capital call” or “capital commitment” facilities, and each a “Subscription Facility”) have served as the cornerstone of the fund finance market for the past 20 years. Loan availability under a Subscription Facility is subject to a borrowing base, which is typically tied to the remaining amount of the pledged uncalled capital commitments of investors satisfying certain eligibility requirements, multiplied by an advance rate.