News & Analysis

'What would you do if you were in my position?' asked one banker, faced with having to turn down borrowers the bank had been trying to woo from a competitor for years; SEC warns that GPs aren’t following their own rules on co-investments.

Even some blue-chip sponsors have been rejected by relationship lenders. This has forced them to branch out, sometimes only to be rebuffed by banks dealing with their own limits on their ability – and appetite – to lend.

Co-investments have been a hot topic in private equity as more limited partners seek ways to build direct exposure alongside their trusted GPs in investments.

There are 'real credit concerns' for some lenders, according to Wells Fargo; Lenders talk about how they're mitigating those credit concerns

NAV covenants and capital call minimums are increasingly being used in subscription credit line deal documents, say market participants. Even recourse to assets may be on the table.

The traditional collateral for subscription credit lines, LPs' uncalled capital, has performed strikingly well, so far. But some lenders are re-evaluating the risk of these loans, and there is an increased focus on whether LPs have the incentive to meet capital calls for some funds.

Introducing the first installments of our six-part feature on the subscription credit line market.

Major lenders in subscription credit facilities reined in new lending shortly after the crisis began in March, focusing on existing clients and facing various constraints. Smaller banks stepped in to pick up new business they might otherwise not have been able to compete for.

Everyone in the subscription credit facility market is ‘busy’, but it is far from business as usual. Industry players wonder what the future of the sector looks like, and reveal critical changes that may suggest a new, if still evolving, normal for the market.

The SEC office’s risk alert confirms what recent trends suggested; eVestment announces tool to help inundated CFOs.