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Standstill Provisions in Subscription Facilities

August 15, 2023 (2 min read)

Read this article discussing standstill provisions in subscription facilities. In recent years, private equity fund requests for standstill provisions in subscription credit facilities have become more commonplace. A standstill provision offers a fund the first opportunity to issue a capital call to repay the subscription facility after an event of default has occurred.

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Related Content

  • Subscription Facilities
    Check out this practice note discussing structuring subscription facilities. A subscription facility is a line of credit to an investment fund typically secured by the fund’s right to issue capital calls to investors.
  • Subscription Facility Exclusion Events
    Review this practice note focusing on the market-accepted circumstances triggering the exclusion of investors from a subscription facility borrowing base, the rationale for such exclusion events, and frequent comments and perspectives relating to documentation of the same.
  • Exclusion Event Definition in Subscription Facilities
    Use this definition of exclusion event clause in a subscription facility to describe the triggers that would remove an investor’s capital commitments from the borrowing base in that facility. These are the events that are likely to impact the investor’s financial capability or legal obligation to fund its capital contributions to repay the subscription facility.

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