Sub lines: Later today, keep an eye out for Part 5 of my series on the subscription credit line market, in which I take a look at how banks are trying to free up balance sheet (or get rid of risk) via secondary sales, sometimes of older-vintage (thus, pre-covid) exposures. It also includes a little aside on what increased (attempted) selling might mean for borrowers. While many GPs get right of first refusal, I’ve seen at least one credit agreement that allows the bank to sell all or part of its interest in a line without notice or approval from the GP.
What’s been shown to potential buyers has been described as anywhere from feeling like a ‘freeing up space’ play to a ‘worried about risk’ play. But that is essentially impossible to verify, so – spoiler alert – I’ve left the names of the sellers that came up during reporting out of the story. Nonetheless, both approaches seem to me to be natural ones in the current environment.
Download the new issue: Click on the link to the left to view and download our July/August issue!
And if you can’t wait to finish it, the issue features the entirety of our cover story, “The shifting landscape for subscription credit,” as well as three of the attendant series on goings-on in that market. It also contains analyses of the Institutional Limited Partners Association’s new guidelines for disclosure on subscription credit line use, outlooks on Q2 valuations, reviews of important regulatory trends, insight on the entrance of ESG ratings firms into private markets, updates on government aid programs and a lot more.
Email prepared by Graham Bippart