October 28, 2014
By: Thomas Volet
Moses & Singer Client Alert
Subscription finance is simply an extension of credit to an investment vehicle, generally a private equity fund that is secured in whole or in part by a collateral assignment of the obligations of the borrower’s equity investors to make future contributions of previously subscribed capital to the borrower.
A more difficult question is whether the terms of the credit facility reflect the risk allocations that have evolved in response to the implications of the fundamental defining structure of subscription finance. This article is intended to isolate and focus on a handful of hallmark credit profile features of subscription finance.