Banking

A banking crisis coupled with a hike in interest rates has significantly altered the rules of engagement for capital call facilities.

Hazeltree CEO says many banks and PE firms have yet to modernize their cash management.

Treasury management solutions have become a bigger part of some firms’ business continuity planning, helping them sustain a ‘work from home’ mode that complicates cash operations, as well as helping them to forecast the months of uncertainty ahead.

Investec bankers say they’ve seen a significant rise in FX inquiries from non-traditional users of hedges as the pandemic roils markets, as well as from credit funds feeling the stress of currency movements.

Lawyers from Paul Weiss pinpoint the areas of a private equity firm operations that may need to be adjusted to account for the coronavirus outbreak, including fund documentation, valuation and banking relationships.

In the US, unitranche loans have given the senior-junior debt capital structure a run for its money in recent years, but mezzanine lenders are still finding deals.

This addition to the financial engineer’s toolkit is gaining in popularity, but what do LPs think of it?

The EBITDA addback has become one of the most controversial aspects of deal documentation. Research shows lenders are resisting the most extreme examples.

The firm tries to secure non-recourse financing, long-term maturities and little-to-no financial maintenance covenants, said Cyrus Madon on an earnings call last week.