Narrative
Full Description
Project narrative
In October 2022, the New York Branch of the Industrial and Commercial Bank of China (ICBC) entered into a $150,000,000 USD subscription secured revolving credit facility (RCF) agreement with KKR & Co. Inc. — a Delaware-incorporated American global investment company and private equity firm headquartered in New York City and listed on the New York Stock Exchange — for unspecified purposes.
Staff comments
1. There is very little information available about this facility, including in various KKR publications and filings, though its presence in an ICBC booklet is definitive proof of its existence. Among other possibilities, facility may have been syndicated or the borrower was some KKR-entity(s) not widely documented in the public view. This issue merits further investigation. 2. Fund-level subscription-secured revolving lines of credit are a well-established instrument in the toolkits of a variety of private equity fund sponsors and managers, including for venture capital funds, hedge funds, debt funds, secondaries funds, and real estate funds. In many respects, real estate funds’ subscription-secured credit facilities are operationally similar to those of funds investing in various other asset classes. Subscription lines are generally secured solely by pledges of a fund’s rights to capital contributions from its investors (in addition to pledges of fund-level accounts into which investor capital is contributed), which allows real estate fund managers to provide collateral to the subscription lender without impairing their ability to pledge equity interests and real property held by the funds’ subsidiaries to property-level lenders. For more information, see https://www.goodwinlaw.com/en/insights/publications/2024/04/alerts-realestate-fs-subscription-secured-credit-real-estate-funds.