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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Banking and Finance

Date & Time
  • event Date

    Friday, September 6, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will explore the recent rise in credit support transactions in fund finance. The panel will discuss structuring considerations and explain the differences between the common types of credit support including pledges of sponsor's rights with respect to investor capital commitments, equity commitment letters (ECLs), guaranties, keepwell agreements, and comfort letters.

Faculty

Saúl De La Guardia
Senior Partner
Riemer & Braunstein LLP

Mr. De La Guardia concentrates his practice on representing lenders in real estate finance and commercial loans, with a particular focus on structured facilities for institutional and fund borrowers in the real estate space. During his career in New York and Boston, he has represented clients in a wide variety of financings, including secured and unsecured borrowing base facilities for REITs and investment funds, subscription secured lines, unsecured and structurally subordinated lines, real estate construction loans, acquisition finance transactions, and other complex asset-based and cash-flow facilities. Mr. De La Guardia has represented lenders in all rungs of the capital structure and has experience in navigating complex intercreditor arrangements and organizational structures. He has also advised clients on bankruptcy and creditors’ rights issues in connection with workouts of troubled loans and bankruptcy proceedings, including with respect to DIP financing and recovery actions.

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Tonya Major Gauff
Partner
Dla Piper LLP US

Ms. Gauff is an experienced finance lawyer representing a broad range of clients in negotiating various debt transactions. Her finance practice includes assisting public and private borrowers, lenders, investors, financial institutions, real estate investment trusts, and private equity sponsors and their portfolio companies in structuring and negotiating secured and unsecured senior, mezzanine, first-lien and second-lien, and subordinated financings; leveraged buyouts; dividend recapitalizations; workouts; acquisition financings; private debt offerings; and general working capital credit facilities. Ms. Gauff also has extensive experience negotiating and documenting domestic and international subscription-backed credit facilities.

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Daniel P. Griffith
Attorney
Goodwin Procter LLP

Mr. Griffith practices in the firm’s Business Law Department and is a member of its Real Estate Industry group. He represents clients in a variety of commercial real estate transactions, including complex joint venture arrangements, restructurings, mortgage, construction and mezzanine financings representing both borrowers and lenders, and asset-level and entity-level acquisitions and dispositions. Mr. Griffith also advises real estate investment funds in structuring subscription secured credit facilities.

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Description

While credit support packages have always been a key component of lender underwriting, in the current fundraising environment there has been an increased focus on credit support arrangements in the fund finance market, particularly ECLs. It is expected that as private markets and the fund finance industry continue to evolve, there will be a heightened focus on credit support packages that lenders rely upon to underwrite these investments.

There are a variety of collateral and credit support packages including pledges of sponsor's rights with respect to investor capital commitments, guaranties, ECLs, keepwell agreements, and comfort letters. These forms of credit support and financing structures vary in form and complexity on a deal-specific basis and are utilized by funds to satisfy lenders' underwriting requirements. The types of credit support used by funds and lenders share much in common with traditional lending facilities and rely heavily on tried-and-true lending instruments. Counsel for lenders and funds should have a thorough understanding of each and how they fit into the private investment fund financing structure.

Listen as our panel provides practice tips for structuring and documenting credit support agreements in fund finance transactions. The panel will discuss the variations on each type of credit support and the pros and cons of each in different financing scenarios.

Outline

  1. Current market conditions and trends with respect to credit support in the fund finance space
  2. Forms of credit support
    1. Pledges of capital call rights
    2. Guaranties
    3. ECLs
    4. Keepwell agreements
    5. Comfort letters
    6. Other forms of credit support
  3. Differences between the various forms of credit support and guidance on circumstances when each instrument should be used
  4. Benefits, risks, and considerations with each form of credit support
  5. Enforcing credit support agreements

Benefits

The panel will review these and other key issues:

  • What are the latest trends and developments in credit support in NAV and subscription loan products?
  • What are the key differences between guaranties, ECLs, keepwell agreements, and comfort letters and what are the appropriate circumstances when each instrument should be used?
  • What are the benefits and risks associated with the various forms of credit support agreements?
  • How does the lender enforce credit support agreements to repay a credit facility?