i Table of contents 365

Private Credit 2025

Definitive global law guides offering comparative analysis from top-ranked lawyers

INTRODUCTION		5
Contributed by Stelios Saffos, Dan Seale, Peter Sluka and Alfred Xue, Latham & Watkins		5
AUSTRALIA		11
Law and Practice		11
Contributed by Jones Day		11
Trends and Developments		33
Contributed by Jones Day		33
BELGIUM		40
Law and Practice		40
Contributed by Clifford Chance		40
Trends and Developments		57
Contributed by Clifford Chance		57
FINLAND		62
Law and Practice		62
Contributed by Waselius		62
FRANCE		84
Law and Practice		84
Contributed by Clifford Chance		84
Trends and Developments		108
Contributed by Clifford Chance		108
GERMANY		113
Law and Practice		113
Contributed by Freshfields		113
HONG KONG SAR, CHINA		138
Law and Practice		138
Contributed by Mayer Brown		138
Trends and Developments		160
Contributed by Mayer Brown		160
INDIA		165
Law and Practice		165
Contributed by JSA Advocates & Solicitors		165
Trends and Developments		186
Contributed by JSA Advocates & Solicitors		186
LUXEMBOURG		193
Law and Practice		193
Contributed by Clifford Chance		193
Trends and Developments		208
Contributed by Linklaters LLP		208
NETHERLANDS		217
Law and Practice		217
Contributed by Clifford Chance		217
Trends and Developments		234
Contributed by Clifford Chance		234
NEW ZEALAND		239
Law and Practice		239
Contributed by Russell McVeagh		239
SINGAPORE		263
Law and Practice		263
Contributed by Mayer Brown		263
Trends and Developments		284
Contributed by Mayer Brown		284
UK		289
Law and Practice		289
Contributed by Latham & Watkins		289
Trends and Developments		317
Contributed by Latham & Watkins		317
USA		324
Law and Practice		324
Contributed by Latham & Watkins		324
Trends and Developments		349
Contributed by Latham & Watkins		349
USA – ILLINOIS		355
Trends and Developments		355
Contributed by Mayer Brown		355
USA – NEW YORK		360
Trends and Developments		360
Contributed by Mayer Brown LLP		360
1. Private Credit Overview		15
1.1 Private Credit Market		15
1.2 Interaction With Public Markets		15
1.3 Acquisition Finance		15
1.4 Challenges		15
1.5 Junior and Hybrid Capital		15
1.6 Sponsored/Non-Sponsored Debt		15
1.7 Recurring Revenue Deals and Late-Stage Lending		15
1.8 Deal Sizes, Fund Sizes and Fundraising		15
1.9 Impending Regulation and Reform		15
2. Regulatory Environment		16
2.1 Licensing and Regulatory Approval		16
2.2 Regulators of Private Credit Funds		16
2.3 Restrictions on Foreign Investments		17
2.4 Compliance and Reporting Requirements		17
2.5 Club Lending and Antitrust		18
3. Structuring and Documentation		19
3.1 Common Structures		19
3.2 Key Documentation		19
3.3 Restrictions on Foreign Direct Lenders		19
3.4 Use of Proceeds and Acquisition Financings		19
3.5 Debt Buyback		20
3.6 Recent Legal and Commercial Developments		20
3.7 Junior and Hybrid Capital		20
3.8 Payment in Kind/Amortisation		20
3.9 Call Protection		20
4. Tax Considerations		20
4.1 Withholding Tax		20
4.2 Other Taxes, Duties, Charges or Tax Considerations		21
4.3 Tax Concerns for Foreign Lenders		21
4.4 Tax Incentives		22
4.5 Non-Bank Status		22
5. Guarantees and Security		22
5.1 Assets and Forms of Security		22
5.2 Floating Charges and/or Similar Security Interests		23
5.3 Downstream, Upstream and Cross-Stream Guarantees		23
5.4 Restrictions on the Target		23
5.5 Other Restrictions		24
5.6 Release of Typical Forms of Security		24
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		25
5.8 Priming Liens and/or Claims		25
5.9 Cash Pooling and Hedging/Cash Management Obligations		26
5.10 Bank Licensing		26
6. Enforcement		27
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		27
6.2 Foreign Law and Jurisdiction		27
6.3 Foreign Court Judgments		27
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		27
6.5 Timing and Cost of Enforcement		27
6.6 Practical Considerations/Limitations on Enforcement		28
6.7 Claims Against Secured Lenders Post-Enforcement		28
7. Bankruptcy and Insolvency		28
7.1 Impact of Insolvency Processes		28
7.2 Waterfall of Payments		29
7.3 Length of Insolvency Process and Recoveries		29
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		30
7.5 Risk Areas for Lenders		30
7.6 Transactions Voidable Upon Insolvency		30
7.7 Set-Off Rights		30
7.8 Out-of-Court v In-Court Enforcement		30
7.9 Dissenting Lenders and Non-Consensual Restructurings		31
7.10 Expedited Restructurings		31
8. Case Studies and Practical Insights		31
8.1 Notable Case Studies		31
8.2 Lessons Learned		32
8.3 Application of Insights		32
1. Private Credit Overview		43
1.1 Private Credit Market		43
1.2 Interaction With Public Markets		43
1.3 Acquisition Finance		43
1.4 Challenges		43
1.5 Junior and Hybrid Capital		44
1.6 Sponsored/Non-Sponsored Debt		44
1.7 Recurring Revenue Deals and Late-Stage Lending		44
1.8 Deal Sizes, Fund Sizes and Fundraising		44
1.9 Impending Regulation and Reform		44
2. Regulatory Environment		45
2.1 Licensing and Regulatory Approval		45
2.2 Regulators of Private Credit Funds		45
2.3 Restrictions on Foreign Investments		45
2.4 Compliance and Reporting Requirements		46
2.5 Club Lending and Antitrust		46
3. Structuring and Documentation		46
3.1 Common Structures		46
3.2 Key Documentation		46
3.3 Restrictions on Foreign Direct Lenders		47
3.4 Use of Proceeds and Acquisition Financings		47
3.5 Debt Buyback		47
3.6 Recent Legal and Commercial Developments		47
3.7 Junior and Hybrid Capital		47
3.8 Payment in Kind/Amortisation		47
3.9 Call Protection		47
4. Tax Considerations		47
4.1 Withholding Tax		47
4.2 Other Taxes, Duties, Charges or Tax Considerations		49
4.3 Tax Concerns for Foreign Lenders		49
4.4 Tax Incentives		50
4.5 Non-Bank Status		50
5. Guarantees and Security		50
5.1 Assets and Forms of Security		50
5.2 Floating Charges and/or Similar Security Interests		50
5.3 Downstream, Upstream and Cross-Stream Guarantees		50
5.4 Restrictions on the Target		51
5.5 Other Restrictions		51
5.6 Release of Typical Forms of Security		51
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		52
5.8 Priming Liens and/or Claims		52
5.9 Cash Pooling and Hedging/Cash Management Obligations		52
5.10 Bank Licensing		52
6. Enforcement		52
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		52
6.2 Foreign Law and Jurisdiction		53
6.3 Foreign Court Judgments		53
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		53
6.5 Timing and Cost of Enforcement		53
6.6 Practical Considerations/Limitations on Enforcement		54
6.7 Claims Against Secured Lenders Post-Enforcement		54
7. Bankruptcy and Insolvency		54
7.1 Impact of Insolvency Processes		54
7.2 Waterfall of Payments		54
7.3 Length of Insolvency Process and Recoveries		54
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		55
7.5 Risk Areas for Lenders		55
7.6 Transactions Voidable Upon Insolvency		55
7.7 Set-Off Rights		55
7.8 Out-of-Court v In-Court Enforcement		55
7.9 Dissenting Lenders and Non-Consensual Restructurings		55
7.10 Expedited Restructurings		56
8. Case Studies and Practical Insights		56
8.1 Notable Case Studies		56
8.2 Lessons Learned		56
8.3 Application of Insights		56
1. Private Credit Overview		65
1.1 Private Credit Market		65
1.2 Interaction With Public Markets		65
1.3 Acquisition Finance		65
1.4 Challenges		65
1.5 Junior and Hybrid Capital		66
1.6 Sponsored/Non-Sponsored Debt		66
1.7 Recurring Revenue Deals and Late-Stage Lending		66
1.8 Deal Sizes, Fund Sizes and Fundraising		66
1.9 Impending Regulation and Reform		66
2. Regulatory Environment		66
2.1 Licensing and Regulatory Approval		66
2.2 Regulators of Private Credit Funds		66
2.3 Restrictions on Foreign Investments		66
2.4 Compliance and Reporting Requirements		66
2.5 Club Lending and Antitrust		67
3. Structuring and Documentation		67
3.1 Common Structures		67
3.2 Key Documentation		67
3.3 Restrictions on Foreign Direct Lenders		67
3.4 Use of Proceeds and Acquisition Financings		67
3.5 Debt Buyback		67
3.6 Recent Legal and Commercial Developments		67
3.7 Junior and Hybrid Capital		68
3.8 Payment in Kind/Amortisation		68
3.9 Call Protection		68
4. Tax Considerations		68
4.1 Withholding Tax		68
4.2 Other Taxes, Duties, Charges or Tax Considerations		68
4.3 Tax Concerns for Foreign Lenders		69
4.4 Tax Incentives		69
4.5 Non-Bank Status		69
5. Guarantees and Security		69
5.1 Assets and Forms of Security		69
5.2 Floating Charges and/or Similar Security Interests		71
5.3 Downstream, Upstream and Cross-Stream Guarantees		71
5.4 Restrictions on the Target		72
5.5 Other Restrictions		72
5.6 Release of Typical Forms of Security		73
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		73
5.8 Priming Liens and/or Claims		73
5.9 Cash Pooling and Hedging/Cash Management Obligations		73
5.10 Bank Licensing		74
6. Enforcement		74
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		74
6.2 Foreign Law and Jurisdiction		75
6.3 Foreign Court Judgments		75
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		75
6.5 Timing and Cost of Enforcement		75
6.6 Practical Considerations/Limitations on Enforcement		76
6.7 Claims Against Secured Lenders Post-Enforcement		76
7. Bankruptcy and Insolvency		76
7.1 Impact of Insolvency Processes		76
7.2 Waterfall of Payments		78
7.3 Length of Insolvency Process and Recoveries		79
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		79
7.5 Risk Areas for Lenders		79
7.6 Transactions Voidable Upon Insolvency		80
7.7 Set-Off Rights		80
7.8 Out-of-Court v In-Court Enforcement		80
7.9 Dissenting Lenders and Non-Consensual Restructurings		81
7.10 Expedited Restructurings		82
8. Case Studies and Practical Insights		82
8.1 Notable Case Studies		82
8.2 Lessons Learned		82
8.3 Application of Insights		83
1. Private Credit Overview		88
1.1 Private Credit Market		88
1.2 Interaction With Public Markets		88
1.3 Acquisition Finance		88
1.4 Challenges		88
1.5 Junior and Hybrid Capital		89
1.6 Sponsored/Non-Sponsored Debt		89
1.7 Recurring Revenue Deals and Late-Stage Lending		89
1.8 Deal Sizes, Fund Sizes and Fundraising		89
1.9 Impending Regulation and Reform		89
2. Regulatory Environment		90
2.1 Licensing and Regulatory Approval		90
2.2 Regulators of Private Credit Funds		91
2.3 Restrictions on Foreign Investments		91
2.4 Compliance and Reporting Requirements		91
2.5 Club Lending and Antitrust		91
3. Structuring and Documentation		91
3.1 Common Structures		91
3.2 Key Documentation		92
3.3 Restrictions on Foreign Direct Lenders		93
3.4 Use of Proceeds and Acquisition Financings		93
3.5 Debt Buyback		93
3.6 Recent Legal and Commercial Developments		93
3.7 Junior and Hybrid Capital		94
3.8 Payment in Kind/Amortisation		94
3.9 Call Protection		94
4. Tax Considerations		94
4.1 Withholding Tax		94
4.2 Other Taxes, Duties, Charges or Tax Considerations		94
4.3 Tax Concerns for Foreign Lenders		94
4.4 Tax Incentives		95
4.5 Non-Bank Status		95
5. Guarantees and Security		95
5.1 Assets and Forms of Security		95
5.2 Floating Charges and/or Similar Security Interests		95
5.3 Downstream, Upstream and Cross-Stream Guarantees		95
5.4 Restrictions on the Target		95
5.5 Other Restrictions		95
5.6 Release of Typical Forms of Security		97
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		97
5.8 Priming Liens and/or Claims		97
5.9 Cash Pooling and Hedging/Cash Management Obligations		97
5.10 Bank Licensing		98
6. Enforcement		98
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		98
6.2 Foreign Law and Jurisdiction		99
6.3 Foreign Court Judgments		99
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		99
6.5 Timing and Cost of Enforcement		99
6.6 Practical Considerations/Limitations on Enforcement		100
6.7 Claims Against Secured Lenders Post-Enforcement		100
7. Bankruptcy and Insolvency		101
7.1 Impact of Insolvency Processes		101
7.2 Waterfall of Payments		102
7.3 Length of Insolvency Process and Recoveries		102
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		103
7.5 Risk Areas for Lenders		103
7.6 Transactions Voidable Upon Insolvency		104
7.7 Set-Off Rights		104
7.8 Out-of-Court v In-Court Enforcement		104
7.9 Dissenting Lenders and Non-Consensual Restructurings		105
7.10 Expedited Restructurings		106
8. Case Studies and Practical Insights		106
8.1 Notable Case Studies		106
8.2 Lessons Learned		107
8.3 Application of Insights		107
1. Private Credit Overview		116
1.1 Private Credit Market		116
1.2 Interaction With Public Markets		117
1.3 Acquisition Finance		117
1.4 Challenges		117
1.5 Junior and Hybrid Capital		118
1.6 Sponsored/Non-Sponsored Debt		119
1.7 Recurring Revenue Deals and Late-Stage Lending		120
1.8 Deal Sizes, Fund Sizes and Fundraising		120
1.9 Impending Regulation and Reform		120
2. Regulatory Environment		121
2.1 Licensing and Regulatory Approval		121
2.2 Regulators of Private Credit Funds		122
2.3 Restrictions on Foreign Investments		122
2.4 Compliance and Reporting Requirements		122
2.5 Club Lending and Antitrust		122
3. Structuring and Documentation		122
3.1 Common Structures		122
3.2 Key Documentation		122
3.3 Restrictions on Foreign Direct Lenders		123
3.4 Use of Proceeds and Acquisition Financings		123
3.5 Debt Buyback		123
3.6 Recent Legal and Commercial Developments		123
3.7 Junior and Hybrid Capital		123
3.8 Payment in Kind/Amortisation		124
3.9 Call Protection		124
4. Tax Considerations		125
4.1 Withholding Tax		125
4.2 Other Taxes, Duties, Charges or Tax Considerations		125
4.3 Tax Concerns for Foreign Lenders		125
4.4 Tax Incentives		125
4.5 Non-Bank Status		125
5. Guarantees and Security		126
5.1 Assets and Forms of Security		126
5.2 Floating Charges and/or Similar Security Interests		127
5.3 Downstream, Upstream and Cross-Stream Guarantees		127
5.4 Restrictions on the Target		128
5.5 Other Restrictions		128
5.6 Release of Typical Forms of Security		128
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		128
5.8 Priming Liens and/or Claims		129
5.9 Cash Pooling and Hedging/Cash Management Obligations		129
5.10 Bank Licensing		130
6. Enforcement		130
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		130
6.2 Foreign Law and Jurisdiction		131
6.3 Foreign Court Judgments		131
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		131
6.5 Timing and Cost of Enforcement		131
6.6 Practical Considerations/Limitations on Enforcement		131
6.7 Claims Against Secured Lenders Post-Enforcement		132
7. Bankruptcy and Insolvency		132
7.1 Impact of Insolvency Processes		132
7.2 Waterfall of Payments		132
7.3 Length of Insolvency Process and Recoveries		133
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		133
7.5 Risk Areas for Lenders		134
7.6 Transactions Voidable Upon Insolvency		135
7.7 Set-Off Rights		135
7.8 Out-of-Court v In-Court Enforcement		135
7.9 Dissenting Lenders and Non-Consensual Restructurings		135
7.10 Expedited Restructurings		136
8. Case Studies and Practical Insights		136
8.1 Notable Case Studies		136
8.2 Lessons Learned		136
8.3 Application of Insights		137
1. Private Credit Overview		142
1.1 Private Credit Market		142
1.2 Interaction With Public Markets		142
1.3 Acquisition Finance		142
1.4 Challenges		142
1.5 Junior and Hybrid Capital		142
1.6 Sponsored/Non-Sponsored Debt		142
1.7 Recurring Revenue Deals and Late-Stage Lending		142
1.8 Deal Sizes, Fund Sizes and Fundraising		143
1.9 Impending Regulation and Reform		143
2. Regulatory Environment		143
2.1 Licensing and Regulatory Approval		143
2.2 Regulators of Private Credit Funds		143
2.3 Restrictions on Foreign Investments		144
2.4 Compliance and Reporting Requirements		144
2.5 Club Lending and Antitrust		144
3. Structuring and Documentation		144
3.1 Common Structures		144
3.2 Key Documentation		145
3.3 Restrictions on Foreign Direct Lenders		145
3.4 Use of Proceeds and Acquisition Financings		145
3.5 Debt Buyback		146
3.6 Recent Legal and Commercial Developments		146
3.7 Junior and Hybrid Capital		146
3.8 Payment in Kind/Amortisation		146
3.9 Call Protection		146
4. Tax Considerations		146
4.1 Withholding Tax		146
4.2 Other Taxes, Duties, Charges or Tax Considerations		146
4.3 Tax Concerns for Foreign Lenders		146
4.4 Tax Incentives		146
4.5 Non-Bank Status		147
5. Guarantees and Security		147
5.1 Assets and Forms of Security		147
5.2 Floating Charges and/or Similar Security Interests		148
5.3 Downstream, Upstream and Cross-Stream Guarantees		148
5.4 Restrictions on the Target		149
5.5 Other Restrictions		149
5.6 Release of Typical Forms of Security		150
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		150
5.8 Priming Liens and/or Claims		150
5.9 Cash Pooling and Hedging/Cash Management Obligations		151
5.10 Bank Licensing		151
6. Enforcement		151
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		151
6.2 Foreign Law and Jurisdiction		152
6.3 Foreign Court Judgments		153
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		154
6.5 Timing and Cost of Enforcement		154
6.6 Practical Considerations/Limitations on Enforcement		154
6.7 Claims Against Secured Lenders Post-Enforcement		154
7. Bankruptcy and Insolvency		155
7.1 Impact of Insolvency Processes		155
7.2 Waterfall of Payments		155
7.3 Length of Insolvency Process and Recoveries		156
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		156
7.5 Risk Areas for Lenders		157
7.6 Transactions Voidable Upon Insolvency		157
7.7 Set-Off Rights		158
7.8 Out-of-Court v In-Court Enforcement		159
7.9 Dissenting Lenders and Non-Consensual Restructurings		159
7.10 Expedited Restructurings		159
8. Case Studies and Practical Insights		159
8.1 Notable Case Studies		159
8.2 Lessons Learned		159
8.3 Application of Insights		159
1. Private Credit Overview		169
1.1 Private Credit Market		169
1.2 Interaction With Public Markets		169
1.3 Acquisition Finance		169
1.4 Challenges		170
1.5 Junior and Hybrid Capital		170
1.6 Sponsored/Non-Sponsored Debt		170
1.7 Recurring Revenue Deals and Late-Stage Lending		170
1.8 Deal Sizes, Fund Sizes and Fundraising		171
1.9 Impending Regulation and Reform		171
2. Regulatory Environment		171
2.1 Licensing and Regulatory Approval		171
2.2 Regulators of Private Credit Funds		171
2.3 Restrictions on Foreign Investments		171
2.4 Compliance and Reporting Requirements		172
2.5 Club Lending and Antitrust		172
3. Structuring and Documentation		172
3.1 Common Structures		172
3.2 Key Documentation		173
3.3 Restrictions on Foreign Direct Lenders		174
3.4 Use of Proceeds and Acquisition Financings		174
3.5 Debt Buyback		174
3.6 Recent Legal and Commercial Developments		174
3.7 Junior and Hybrid Capital		175
3.8 Payment in Kind/Amortisation		175
3.9 Call Protection		175
4. Tax Considerations		175
4.1 Withholding Tax		175
4.2 Other Taxes, Duties, Charges or Tax Considerations		175
4.3 Tax Concerns for Foreign Lenders		176
4.4 Tax Incentives		176
4.5 Non-Bank Status		176
5. Guarantees and Security		177
5.1 Assets and Forms of Security		177
5.2 Floating Charges and/or Similar Security Interests		178
5.3 Downstream, Upstream and Cross-Stream Guarantees		178
5.4 Restrictions on the Target		179
5.5 Other Restrictions		179
5.6 Release of Typical Forms of Security		179
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		179
5.8 Priming Liens and/or Claims		180
5.9 Cash Pooling and Hedging/Cash Management Obligations		180
5.10 Bank Licensing		180
6. Enforcement		180
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		180
6.2 Foreign Law and Jurisdiction		181
6.3 Foreign Court Judgments		181
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		182
6.5 Timing and Cost of Enforcement		182
6.6 Practical Considerations/Limitations on Enforcement		182
6.7 Claims Against Secured Lenders Post-Enforcement		182
7. Bankruptcy and Insolvency		182
7.1 Impact of Insolvency Processes		182
7.2 Waterfall of Payments		183
7.3 Length of Insolvency Process and Recoveries		183
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		183
7.5 Risk Areas for Lenders		183
7.6 Transactions Voidable Upon Insolvency		184
7.7 Set-Off Rights		184
7.8 Out-of-Court v In-Court Enforcement		184
7.9 Dissenting Lenders and Non-Consensual Restructurings		184
7.10 Expedited Restructurings		185
8. Case Studies and Practical Insights		185
8.1 Notable Case Studies		185
8.2 Lessons Learned		185
8.3 Application of Insights		185
1. Private Credit Overview		197
1.1 Private Credit Market		197
1.2 Interaction With Public Markets		197
1.3 Acquisition Finance		197
1.4 Challenges		197
1.5 Junior and Hybrid Capital		197
1.6 Sponsored/Non-Sponsored Debt		197
1.7 Recurring Revenue Deals and Late-Stage Lending		198
1.8 Deal Sizes, Fund Sizes and Fundraising		198
1.9 Impending Regulation and Reform		198
2. Regulatory Environment		199
2.1 Licensing and Regulatory Approval		199
2.2 Regulators of Private Credit Funds		200
2.3 Restrictions on Foreign Investments		200
2.4 Compliance and Reporting Requirements		200
2.5 Club Lending and Antitrust		200
3. Structuring and Documentation		200
3.1 Common Structures		200
3.2 Key Documentation		201
3.3 Restrictions on Foreign Direct Lenders		201
3.4 Use of Proceeds and Acquisition Financings		201
3.5 Debt Buyback		201
3.6 Recent Legal and Commercial Developments		201
3.7 Junior and Hybrid Capital		201
3.8 Payment in Kind/Amortisation		201
3.9 Call Protection		202
4. Tax Considerations		202
4.1 Withholding Tax		202
4.2 Other Taxes, Duties, Charges or Tax Considerations		202
4.3 Tax Concerns for Foreign Lenders		203
4.4 Tax Incentives		203
4.5 Non-Bank Status		203
5. Guarantees and Security		203
5.1 Assets and Forms of Security		203
5.2 Floating Charges and/or Similar Security Interests		203
5.3 Downstream, Upstream and Cross-Stream Guarantees		204
5.4 Restrictions on the Target		204
5.5 Other Restrictions		204
5.6 Release of Typical Forms of Security		204
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		204
5.8 Priming Liens and/or Claims		204
5.9 Cash Pooling and Hedging/Cash Management Obligations		205
5.10 Bank Licensing		205
6. Enforcement		205
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		205
6.2 Foreign Law and Jurisdiction		205
6.3 Foreign Court Judgments		205
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		205
6.5 Timing and Cost of Enforcement		205
6.6 Practical Considerations/Limitations on Enforcement		206
6.7 Claims Against Secured Lenders Post-Enforcement		206
7. Bankruptcy and Insolvency		206
7.1 Impact of Insolvency Processes		206
7.2 Waterfall of Payments		206
7.3 Length of Insolvency Process and Recoveries		206
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		206
7.5 Risk Areas for Lenders		206
7.6 Transactions Voidable Upon Insolvency		206
7.7 Set-Off Rights		207
7.8 Out-of-Court v In-Court Enforcement		207
7.9 Dissenting Lenders and Non-Consensual Restructurings		207
7.10 Expedited Restructurings		207
8. Case Studies and Practical Insights		207
8.1 Notable Case Studies		207
8.2 Lessons Learned		207
8.3 Application of Insights		207
1. Private Credit Overview		221
1.1 Private Credit Market		221
1.2 Interaction With Public Markets		221
1.3 Acquisition Finance		221
1.4 Challenges		221
1.5 Junior and Hybrid Capital		221
1.6 Sponsored/Non-Sponsored Debt		221
1.7 Recurring Revenue Deals and Late-Stage Lending		222
1.8 Deal Sizes, Fund Sizes and Fundraising		222
1.9 Impending Regulation and Reform		222
2. Regulatory Environment		223
2.1 Licensing and Regulatory Approval		223
2.2 Regulators of Private Credit Funds		223
2.3 Restrictions on Foreign Investments		223
2.4 Compliance and Reporting Requirements		224
2.5 Club Lending and Antitrust		224
3. Structuring and Documentation		224
3.1 Common Structures		224
3.2 Key Documentation		224
3.3 Restrictions on Foreign Direct Lenders		225
3.4 Use of Proceeds and Acquisition Financings		225
3.5 Debt Buyback		225
3.6 Recent Legal and Commercial Developments		225
3.7 Junior and Hybrid Capital		225
3.8 Payment in Kind/Amortisation		225
3.9 Call Protection		225
4. Tax Considerations		225
4.1 Withholding Tax		225
4.2 Other Taxes, Duties, Charges or Tax Considerations		226
4.3 Tax Concerns for Foreign Lenders		227
4.4 Tax Incentives		227
4.5 Non-Bank Status		227
5. Guarantees and Security		228
5.1 Assets and Forms of Security		228
5.2 Floating Charges and/or Similar Security Interests		228
5.3 Downstream, Upstream and Cross-Stream Guarantees		228
5.4 Restrictions on the Target		228
5.5 Other Restrictions		229
5.6 Release of Typical Forms of Security		229
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		229
5.8 Priming Liens and/or Claims		229
5.9 Cash Pooling and Hedging/Cash Management Obligations		229
5.10 Bank Licensing		230
6. Enforcement		230
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		230
6.2 Foreign Law and Jurisdiction		230
6.3 Foreign Court Judgments		231
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		231
6.5 Timing and Cost of Enforcement		231
6.6 Practical Considerations/Limitations on Enforcement		231
6.7 Claims Against Secured Lenders Post-Enforcement		231
7. Bankruptcy and Insolvency		231
7.1 Impact of Insolvency Processes		231
7.2 Waterfall of Payments		232
7.3 Length of Insolvency Process and Recoveries		232
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		232
7.5 Risk Areas for Lenders		232
7.6 Transactions Voidable Upon Insolvency		232
7.7 Set-Off Rights		232
7.8 Out-of-Court v In-Court Enforcement		233
7.9 Dissenting Lenders and Non-Consensual Restructurings		233
7.10 Expedited Restructurings		233
8. Case Studies and Practical Insights		233
8.1 Notable Case Studies		233
8.2 Lessons Learned		233
8.3 Application of Insights		233
1. Private Credit Overview		243
1.1 Private Credit Market		243
1.2 Interaction With Public Markets		243
1.3 Acquisition Finance		243
1.4 Challenges		243
1.5 Junior and Hybrid Capital		244
1.6 Sponsored/Non-Sponsored Debt		244
1.7 Recurring Revenue Deals and Late-Stage Lending		244
1.8 Deal Sizes, Fund Sizes and Fundraising		244
1.9 Impending Regulation and Reform		244
2. Regulatory Environment		245
2.1 Licensing and Regulatory Approval		245
2.2 Regulators of Private Credit Funds		245
2.3 Restrictions on Foreign Investments		245
2.4 Compliance and Reporting Requirements		245
2.5 Club Lending and Antitrust		246
3. Structuring and Documentation		247
3.1 Common Structures		247
3.2 Key Documentation		247
3.3 Restrictions on Foreign Direct Lenders		248
3.4 Use of Proceeds and Acquisition Financings		248
3.5 Debt Buyback		248
3.6 Recent Legal and Commercial Developments		248
3.7 Junior and Hybrid Capital		248
3.8 Payment in Kind/Amortisation		249
3.9 Call Protection		249
4. Tax Considerations		249
4.1 Withholding Tax		249
4.2 Other Taxes, Duties, Charges or Tax Considerations		250
4.3 Tax Concerns for Foreign Lenders		250
4.4 Tax Incentives		250
4.5 Non-Bank Status		250
5. Guarantees and Security		250
5.1 Assets and Forms of Security		250
5.2 Floating Charges and/or Similar Security Interests		251
5.3 Downstream, Upstream and Cross-Stream Guarantees		251
5.4 Restrictions on the Target		251
5.5 Other Restrictions		252
5.6 Release of Typical Forms of Security		252
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		252
5.8 Priming Liens and/or Claims		253
5.9 Cash Pooling and Hedging/Cash Management Obligations		253
5.10 Bank Licensing		253
6. Enforcement		254
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		254
6.2 Foreign Law and Jurisdiction		254
6.3 Foreign Court Judgments		255
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		255
6.5 Timing and Cost of Enforcement		256
6.6 Practical Considerations/Limitations on Enforcement		256
6.7 Claims Against Secured Lenders Post-Enforcement		256
7. Bankruptcy and Insolvency		257
7.1 Impact of Insolvency Processes		257
7.2 Waterfall of Payments		258
7.3 Length of Insolvency Process and Recoveries		258
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		259
7.5 Risk Areas for Lenders		259
7.6 Transactions Voidable Upon Insolvency		259
7.7 Set-Off Rights		260
7.8 Out-of-Court v In-Court Enforcement		260
7.9 Dissenting Lenders and Non-Consensual Restructurings		261
7.10 Expedited Restructurings		261
8. Case Studies and Practical Insights		262
8.1 Notable Case Studies		262
8.2 Lessons Learned		262
8.3 Application of Insights		262
1. Private Credit Overview		267
1.1 Private Credit Market		267
1.2 Interaction With Public Markets		267
1.3 Acquisition Finance		267
1.4 Challenges		267
1.5 Junior and Hybrid Capital		267
1.6 Sponsored/Non-Sponsored Debt		267
1.7 Recurring Revenue Deals and Late-Stage Lending		267
1.8 Deal Sizes, Fund Sizes and Fundraising		267
1.9 Impending Regulation and Reform		268
2. Regulatory Environment		268
2.1 Licensing and Regulatory Approval		268
2.2 Regulators of Private Credit Funds		268
2.3 Restrictions on Foreign Investments		269
2.4 Compliance and Reporting Requirements		269
2.5 Club Lending and Antitrust		269
3. Structuring and Documentation		269
3.1 Common Structures		269
3.2 Key Documentation		269
3.3 Restrictions on Foreign Direct Lenders		270
3.4 Use of Proceeds and Acquisition Financings		270
3.5 Debt Buyback		270
3.6 Recent Legal and Commercial Developments		270
3.7 Junior and Hybrid Capital		270
3.8 Payment in Kind/Amortisation		271
3.9 Call Protection		271
4. Tax Considerations		271
4.1 Withholding Tax		271
4.2 Other Taxes, Duties, Charges or Tax Considerations		271
4.3 Tax Concerns for Foreign Lenders		271
4.4 Tax Incentives		271
4.5 Non-Bank Status		271
5. Guarantees and Security		271
5.1 Assets and Forms of Security		271
5.2 Floating Charges and/or Similar Security Interests		273
5.3 Downstream, Upstream and Cross-Stream Guarantees		273
5.4 Restrictions on the Target		273
5.5 Other Restrictions		274
5.6 Release of Typical Forms of Security		274
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		275
5.8 Priming Liens and/or Claims		275
5.9 Cash Pooling and Hedging/Cash Management Obligations		275
5.10 Bank Licensing		276
6. Enforcement		276
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		276
6.2 Foreign Law and Jurisdiction		277
6.3 Foreign Court Judgments		277
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		278
6.5 Timing and Cost of Enforcement		278
6.6 Practical Considerations/Limitations on Enforcement		278
6.7 Claims Against Secured Lenders Post-Enforcement		278
7. Bankruptcy and Insolvency		279
7.1 Impact of Insolvency Processes		279
7.2 Waterfall of Payments		280
7.3 Length of Insolvency Process and Recoveries		280
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		280
7.5 Risk Areas for Lenders		280
7.6 Transactions Voidable Upon Insolvency		281
7.7 Set-Off Rights		281
7.8 Out-of-Court v In-Court Enforcement		282
7.9 Dissenting Lenders and Non-Consensual Restructurings		282
7.10 Expedited Restructurings		283
8. Case Studies and Practical Insights		283
8.1 Notable Case Studies		283
8.2 Lessons Learned		283
8.3 Application of Insights		283
1. Private Credit Overview		292
1.1 Private Credit Market		292
1.2 Interaction With Public Markets		292
1.3 Acquisition Finance		293
1.4 Challenges		293
1.5 Junior and Hybrid Capital		293
1.6 Sponsored/Non-Sponsored Debt		294
1.7 Recurring Revenue Deals and Late-Stage Lending		294
1.8 Deal Sizes, Fund Sizes and Fundraising		294
1.9 Impending Regulation and Reform		295
2. Regulatory Environment		295
2.1 Licensing and Regulatory Approval		295
2.2 Regulators of Private Credit Funds		295
2.3 Restrictions on Foreign Investments		295
2.4 Compliance and Reporting Requirements		296
2.5 Club Lending and Antitrust		296
3. Structuring and Documentation		296
3.1 Common Structures		296
3.2 Key Documentation		297
3.3 Restrictions on Foreign Direct Lenders		297
3.4 Use of Proceeds and Acquisition Financings		298
3.5 Debt Buyback		298
3.6 Recent Legal and Commercial Developments		298
3.7 Junior and Hybrid Capital		298
3.8 Payment in Kind/Amortisation		299
3.9 Call Protection		299
4. Tax Considerations		300
4.1 Withholding Tax		300
4.2 Other Taxes, Duties, Charges or Tax Considerations		301
4.3 Tax Concerns for Foreign Lenders		301
4.4 Tax Incentives		301
4.5 Non-Bank Status		301
5. Guarantees and Security		302
5.1 Assets and Forms of Security		302
5.2 Floating Charges and/or Similar Security Interests		303
5.3 Downstream, Upstream and Cross-Stream Guarantees		303
5.4 Restrictions on the Target		303
5.5 Other Restrictions		303
5.6 Release of Typical Forms of Security		304
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		304
5.8 Priming Liens and/or Claims		305
5.9 Cash Pooling and Hedging/Cash Management Obligations		305
5.10 Bank Licensing		305
6. Enforcement		305
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		305
6.2 Foreign Law and Jurisdiction		306
6.3 Foreign Court Judgments		306
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		307
6.5 Timing and Cost of Enforcement		307
6.6 Practical Considerations/Limitations on Enforcement		307
6.7 Claims Against Secured Lenders Post-Enforcement		308
7. Bankruptcy and Insolvency		308
7.1 Impact of Insolvency Processes		308
7.2 Waterfall of Payments		310
7.3 Length of Insolvency Process and Recoveries		311
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		311
7.5 Risk Areas for Lenders		311
7.6 Transactions Voidable Upon Insolvency		311
7.7 Set-Off Rights		313
7.8 Out-of-Court v In-Court Enforcement		313
7.9 Dissenting Lenders and Non-Consensual Restructurings		313
7.10 Expedited Restructurings		315
8. Case Studies and Practical Insights		315
8.1 Notable Case Studies		315
8.2 Lessons Learned		315
8.3 Application of Insights		316
1. Private Credit Overview		328
1.1 Private Credit Market		328
1.2 Interaction With Public Markets		328
1.3 Acquisition Finance		328
1.4 Challenges		328
1.5 Junior and Hybrid Capital		329
1.6 Sponsored/Non-Sponsored Debt		329
1.7 Recurring Revenue Deals and Late-Stage Lending		329
1.8 Deal Sizes, Fund Sizes and Fundraising		329
1.9 Impending Regulation and Reform		329
2. Regulatory Environment		330
2.1 Licensing and Regulatory Approval		330
2.2 Regulators of Private Credit Funds		330
2.3 Restrictions on Foreign Investments		330
2.4 Compliance and Reporting Requirements		330
2.5 Club Lending and Antitrust		330
3. Structuring and Documentation		330
3.1 Common Structures		330
3.2 Key Documentation		331
3.3 Restrictions on Foreign Direct Lenders		331
3.4 Use of Proceeds and Acquisition Financings		331
3.5 Debt Buyback		332
3.6 Recent Legal and Commercial Developments		332
3.7 Junior and Hybrid Capital		332
3.8 Payment in Kind/Amortisation		332
3.9 Call Protection		333
4. Tax Considerations		334
4.1 Withholding Tax		334
4.2 Other Taxes, Duties, Charges or Tax Considerations		334
4.3 Tax Concerns for Foreign Lenders		335
4.4 Tax Incentives		335
4.5 Non-Bank Status		335
5. Guarantees and Security		335
5.1 Assets and Forms of Security		335
5.2 Floating Charges and/or Similar Security Interests		337
5.3 Downstream, Upstream and Cross-Stream Guarantees		338
5.4 Restrictions on the Target		339
5.5 Other Restrictions		339
5.6 Release of Typical Forms of Security		340
5.7 Rules Governing the Priority of Competing Security Interests and/or Claims		340
5.8 Priming Liens and/or Claims		341
5.9 Cash Pooling and Hedging/Cash Management Obligations		341
5.10 Bank Licensing		341
6. Enforcement		342
6.1 Enforcement of Collateral by Non-Bank Secured Lenders		342
6.2 Foreign Law and Jurisdiction		343
6.3 Foreign Court Judgments		343
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights		343
6.5 Timing and Cost of Enforcement		344
6.6 Practical Considerations/Limitations on Enforcement		344
6.7 Claims Against Secured Lenders Post-Enforcement		344
7. Bankruptcy and Insolvency		344
7.1 Impact of Insolvency Processes		344
7.2 Waterfall of Payments		345
7.3 Length of Insolvency Process and Recoveries		345
7.4 Rescue or Reorganisation Procedures Other Than Insolvency		345
7.5 Risk Areas for Lenders		346
7.6 Transactions Voidable Upon Insolvency		346
7.7 Set-Off Rights		347
7.8 Out-of-Court v In-Court Enforcement		347
7.9 Dissenting Lenders and Non-Consensual Restructurings		347
7.10 Expedited Restructurings		348
8. Case Studies and Practical Insights		348
8.1 Notable Case Studies		348
8.2 Lessons Learned		348
8.3 Application of Insights		348

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