FINLAND Law and Practice Contributed by: Timo Lehtimäki, Niklas Thibblin, Essi Hietaoja and Oona Honkamaa, Waselius
1.9 Impending Regulation and Reform Finnish regulators are currently not focused on private credit lenders, and there are no pend - ing proposals for regulation. However, given the rapid growth of the private credit market, regula - tors might take a greater interest in this sector in the future (though any regulation will most likely come from the EU level). 2. Regulatory Environment 2.1 Licensing and Regulatory Approval Lenders may require a licence to provide loans to Finnish borrowers. Whether a foreign lender needs a licence depends first on whether they have actively solicited a Finnish borrower for the lending transaction. In cases where the foreign lender has active - ly solicited an entity in Finland for the lending transaction, it becomes necessary to analyse the position further. Generally, private credit funds do not need to be licensed to lend into Finland or to take the benefit of security over assets located in Finland. Reverse solicitation is also available. 2.2 Regulators of Private Credit Funds The Finnish Financial Supervisory Authority is the principal local regulatory authority supervis - ing regulated entities within the financial sector. 2.3 Restrictions on Foreign Investments There are no restrictions on foreign investment in private credit funds in Finland (apart from cus - tomary KYC, AML and sanctions checks). 2.4 Compliance and Reporting Requirements No Finnish compliance or reporting require - ments would apply, assuming the foreign lender
available, enforcement proceedings and similar aspects. 1.5 Junior and Hybrid Capital In the Finnish market, the loans provided by pri - vate credit providers are typically senior-secured (with potentially a super-senior revolving credit facility provided by a traditional bank on top of that). Certain specialty lenders have offered hybrid capital financing, such as convertible notes, typically to distressed publicly traded companies. 1.6 Sponsored/Non-Sponsored Debt The primary focus of private credit providers has been on private equity sponsors and their port - folio companies, though in some cases private credit providers also extend capital to founder- owned or closely held companies. Public com - panies are only rarely targeted by private credit providers. 1.7 Recurring Revenue Deals and Late- Stage Lending There is not currently a large recurring revenue market in Finland; therefore, private credit pro - viders are not yet active in the Finnish markets, apart from general inquiries. 1.8 Deal Sizes, Fund Sizes and Fundraising Typically, private credit transactions in Finland range from EUR10 million to EUR100 million, though for larger private credit deals the deal size can go beyond EUR100 million. Finnish funds that are titled private credit funds are pre - dominantly funds of funds investing into much larger, actual private credit funds, and there is no representative fundraising market for Finnish actual private credit funds.
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