Ongoing Developments Related to FinCEN’s CIBanco Order
On June 25, 2025, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued its first...
Legal Update Archive
LEGAL UPDATES
CRD VI: Updated Implications for US Fund Finance Lenders
The European Banking Authority (“EBA”), in consultation with the European Securities and Markets Authority and the European Insurance...
Asset-Level Eligibility Series: Margin Stock
This Legal Update explores why, in order for an underlying loan to be included in a warehouse facility’s...
Sovereign Immunity in Subscription Credit Facilities: UK
Government pension plans, state endowment funds, sovereign wealth funds and other arms of sovereign states are often investors in funds which borrow under subscription credit facilities.
Subscription Finance: Cascading Pledges
Cascading pledges are frequently used in subscription finance to avoid legal impediments, avoid tax implications and mitigate prohibited transaction risk under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Section 4975 of the Internal Revenue Code, as amended (the “Code”), while still providing lenders with collateral rights.
Advantages of Express LPA Third-Party Beneficiary Provisions for Subscription Credit Facility Lenders
An express third-party beneficiary provision running in favor of a lender in a fund’s limited partnership agreement (an “LPA”) is helpful for subscription credit facilities. It bolsters the rights and remedies of a subscription credit facility lender (a “Subscription Lender”) by providing it with an independent and direct right to enforce key LPA provisions if the fund borrower defaults under the facility—in particular, rights under the LPA related to calling capital from the fund’s investors, receiving payments, and enforcing LPA remedies against defaulting investors.
Investor Letters in Subscription Credit Facilities: Strategic Benefits for SMAs and Concentrated Investor Funds
Subscription credit facilities are a common financing tool for investment funds, enabling borrowing against the unfunded capital commitments of investors. Historically, lenders required investor letters (also referred to as investor acknowledgment letters) from each investor or at least each borrowing base investor to directly confirm their obligation to fund capital calls for the benefit of the lender.
Participations in the Fund Finance Market
Participations are increasingly being utilized in the finance industry, serving as a mechanism for lenders to manage credit...
Refresher: EU Capital Requirements Directive 6 (“crd6”) – What Cross-border Financial Institutions Need to Know
Many US and other non-EU financial institutions which lend or undertake trade finance business on a cross border...
Subscription Credit Facilities: Understanding the Collateral
Subscription credit facilities, commonly referred to as “sub-lines” or “capital call facilities,” are a cornerstone of private equity...