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ARTICLE · 30 NOVEMBER 2016

Increased Flexibility For Irish Loan Origination Funds

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The Central Bank of Ireland has announced positive changes to the rules applicable to Irish authorised Loan Origination Funds which increase the range of investments a LO Fund may make...

IrelandCorporate/Commercial Law

The Central Bank of Ireland has announced positive changes to the rules applicable to Irish authorised Loan Origination Funds ("LO Funds") which increase the range of investments a LO Fund may make, and provide welcome additional flexibility to LO Fund managers.

With effect from 3 January 2017, the rules requiring Irish "Qualifying Investor" Alternative Investment Funds ("QIAIFs") authorised as LO Funds to restrict their operations to issuing loans, participating in loans and lending, and operations directly arising from those activities, including handling realised security, are being relaxed to allow other investments linked to the loan origination strategy.

The changes to the Central Bank's rules will allow LO Funds to invest in debt and equity securities of entities or groups to which the LO Fund lends. Investments in debt and equity securities for treasury, cash management or hedging purposes will also be permitted. LO Funds will also be able to engage in

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