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ARTICLE · 31 OCTOBER 2019

Utilizing Repurchase Facilities And Related Protected Contracts As An Alternative Source For Fund Liquidity

Mayer Brown
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Subscription-backed credit facilities (also known as "capital call" or "capital commitment" facilities, and each a "Subscription Facility") have served as the cornerstone of the fund finance market for the past 20 years.

United StatesInsolvency/Bankruptcy/Re-Structuring
Todd Bundrant
Todd Bundrant
Susannah L. Schmid
Susannah L. Schmid
Eric Reilly
Eric Reilly
Monique Mulcare
Monique Mulcare
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I. Introduction

Subscription-backed credit facilities (also known as "capital call" or "capital commitment" facilities, and each a "Subscription Facility") have served as the cornerstone of the fund finance market for the past 20 years. Loan availability under a Subscription Facility is subject to a borrowing base, which is typically tied to the remaining amount of the pledged uncalled capital commitments of investors satisfying certain eligibility requirements, multiplied by an advance rate. However, in connection with the ongoing evolution of the fund finance market, we have seen a growing interest among real estate and other private credit funds (each, a "Fund") for additional fund financing tools to leverage the value of their portfolio assets and optimize investment returns.

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