Credit Support in Fund Finance: Documentation and Enforcement
Capital Commitments, Guaranties, Equity Commitment Letters
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will examine three types of credit support packages that lenders may consider when lending to a private investment fund. The panel will discuss the credit support features of unfunded equity capital commitments of limited partners (capital commitments), a guaranty and an equity commitment letter (ECL), and how they fit into the private investment fund financing structure.
Outline
- Forms of credit support in fund finance
- Unfunded capital commitments
- Guarantees
- Equity commitment letters
- Comparing capital commitments, guarantees, and ECLs
- Enforcement of credit support in fund finance
- Unfunded capital commitments
- Guarantees
- Equity commitment letters
- Comparing capital commitments, guarantees, and ECLs
Benefits
The panel will review these and other relevant issues:
- How can capital commitments be used as credit support as opposed to the more frequent use as collateral in connection with a subscription backed credit facility?
- What are the differences between a guaranty and an ECL?
- If necessary, how does the lender enforce capital commitments, guarantees, and ECLs to repay a credit facility?
Faculty
Cheryl A. Lagay
Partner
Reed Smith
Ms. Lagay focuses her practice on representing institutional lenders, agent banks, U.S. and non-U.S. corporate... | Read More
Ms. Lagay focuses her practice on representing institutional lenders, agent banks, U.S. and non-U.S. corporate borrowers and financial sponsors across a variety of industries, including the healthcare, pharmaceutical, textile and financial services industries. She has significant experience with leveraged finance transactions, including acquisition financings, cash flow and asset-based lending transactions, syndicated and bi-lateral financings and other secured and unsecured lending transactions. Ms. Lagay also represents borrowers and lenders in a full range of Funds Finance transactions, including subscription line facilities, NAV facilities, as well as hybrid, co-invest and general partner facilities.
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James S. Lawlor
Counsel
Reed Smith
Mr. Lawlor is a member of the Financial Industry Group. His practice includes representation of lenders and borrowers... | Read More
Mr. Lawlor is a member of the Financial Industry Group. His practice includes representation of lenders and borrowers in commercial finance matters and of issuers, underwriters and credit enhancers in taxable and tax exempt debt offerings. Mr. Lawlor has extensive and diverse experience in public, securitized and project financings. He has served as bond, underwriter, bank and borrower counsel in bond issuances, and as both lender's and borrower's counsel on syndicated and bilateral bank credit agreements. A significant portion of Mr. Lawlor’s practice involves finance transactions in the healthcare, communications and media, energy, higher education, non-profit, and transportation industries.
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Charlie J. Miller
Attorney
Reed Smith
Mr. Miller's practice focuses on fund finance transactions, primarily representing domestic and foreign lenders and... | Read More
Mr. Miller's practice focuses on fund finance transactions, primarily representing domestic and foreign lenders and agents in structuring, negotiating and documenting credit facilities and other lending arrangements for multi-jurisdictional fund vehicles.
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