Some top sponsors left in the cold as sub line bankers make tough choices

'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.

Part 4 of our feature on the sub line market, “Rethinking returns…and relationships,” takes a close look at the confluence of technical and strategic factors causing some banks to say no even to some of the market’s top borrowers.

In case you’ve missed them, here are the links to the feature so far, and other stories in the series:

Part 1: The shifting landscape for subscription credit; Part 2: Take it to the limit; Part 3: ’Real credit concerns’; ASI: Banks are building out sub line syndication teams; Sub line lenders look beyond LP collateral.

SEC calls out conflicts in how GPs allocate co-investments: The Office of Compliance Inspections and Examinations said in its recent risk alert that GPs aren’t following their own policies governing how they disclose and allocate co-investments to investors in funds.

ILPA news: The Institutional Limited Partners Association named four new directors to its board and approved three re-standing directors.

Email prepared by Graham Bippart