Wells Fargo to prompt subscription credit facility revival

Author: Michael Washburn | Published: 28 Sep 2012

US lawyers expect Wells Fargo’s $6 billion acquisition of the subscription-lending portfolio of WestLB to prompt a resurgence in subscription credit facility use. Here’s why.

The subscription credit facility provides liquidity to funds and a lower default risk for the lender than many other financial products.

A partner at a large corporate firm in New York City said the market for the subscription credit facility product had weathered the storm of the last downturn.

“Generally, the credit is based upon investors who provide capital commitments to the fund itself rather than the fund,” the partner said. “Such investors tend to be large institutions with...