The Central Bank has announced that it intends to amend its
requirements for loan originating qualifying investor AIFs
(L-QIAIFs).
The Central Bank intends that the relevant section of its AIF
Rulebook will be amended to allow L-QIAIFs to invest in "debt
and equity securities of entities or groups to which the loan
originating QIAIF lends or which are held for treasury, cash
management or hedging purposes". The Central Bank believes
that this rule change is consistent with European regulation,
particularly the ELTIF Regulation, as it allows an L-QIAIF to make
other investments "linked to the loan origination
strategy".
The ability to invest in debt and equity securities is a welcome
relaxation of the existing rules which prohibit an L-QIAIF from
investing in non-loan assets. This should be useful in a typical
lending arrangement in which the lender grants a loan to the
borrower but is also issued with warrants in such a borrower.
However, the proposed wording does
