Hedge Funds and Other Investment Funds as Credit Providers
Lawyers in our Global Finance Group have substantial experience representing hedge funds and other investment funds as credit providers. In some cases, these credit facilities are coupled with warrants or other forms of equity investments by such funds in the borrowing entities. Many of the fund lenders we represent consider themselves “special situations” lenders who extend credit to borrowers that are unable to access the more traditional bank loan markets. As a result, these types of credit facilities tend to follow an asset-based lending model with tight credit controls. They often present unusual issues or risks that require our legal analysis as part of the credit underwriting process. Funds are particularly active as second-lien credit providers; therefore our lawyers who represent funds as lenders have ongoing opportunities to keep abreast of the state of the market in terms of the related intercreditor issues. We have represented funds and other entities in connection with acquisitions and sales of portfolios of corporate loans and consumer loans, including auto loans, credit card receivables, student loans, home improvement loans and mortgage loans. We also have funds and other clients in connection with acquisitions and financings of securitization residuals and servicing rights.