The Corporate Collateral Package In Subscription Credit Facilities: A Square Peg In A Round Hole

Those in the subscription credit market are all familiar with traditional collateral arrangements over the capital call rights of Cayman funds formed as exempted limited partnerships (ELP).

Recently, there has been a consistent increase in the use of Cayman funds formed as Cayman exempted companies. The use of Cayman companies (as opposed to ELPs) in the traditional collateral capital call deal has given rise to the need for some unique structures.

Any proposed security over a Cayman exempted company's right to draw down outstanding capital commitments from its shareholders differs significantly from the arrangements which have become common practice in relation to securing capital call rights of Cayman ELPs.