Fundraising

'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.

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.

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.

Buyouts brings some LP perspective to the NAV loan market. Plus: portfolio company debt-buybacks, and NAV loans for credit funds and even LPs.

Portfolio finance can offer additional investment firepower or a source of liquidity, both of which are in high demand in the fallout from the pandemic, explains Augustin Duhamel.

Update on the NAV lending market in our June cover story; Fees and Expenses survey deadline extended; Proskauer’s full GP-led liquidity guide.

Changes to the Main Street Lending Program ease access for PE-backed companies; the second installment of our preview of Proskauer’s GP-led guide.