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ARTICLE · 06 MARCH 2025

Private Credit Portfolio Back Leverage

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The rise of the direct lending market has led to a dramatic rise in supporting liquidity strategies to optimize the market.

United StatesFinance and Banking
E. Perry Hicks
E. Perry Hicks
Linda E. Boss
Linda E. Boss
Michael P. Gaffney
Michael P. Gaffney
Mark C. Dempsey
Mark C. Dempsey
Todd Bundrant
Todd Bundrant
Sheel Patel
Sheel Patel
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The rise of the direct lending market has led to a dramatic rise in supporting liquidity strategies to optimize the market. These strategies include the use of financings to provide market participants with leverage and/or supplemental liquidity to support their direct lending activities. These financing go by various names, including private credit ABL, SPV drop-down, CLO-lite, and CLO warehouse, among others, but have a common general structure that draws from traditional secured lending and structured financing transactions. In this Legal Update, our team addresses some of the basic characteristics, structural considerations and complexities that are present in these facilities.

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