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Types of contingent funding

ASSET BACKED FUNDING

The sponsor either funds the purchase of assets or transfers assets to a Special Purpose Vehicle (SPV) that is jointly owned by the sponsor and the trustee.

DIRECT ASSET TRANSFERS

A transfer of non-cash assets, conditionally or unconditionally, from the sponsor to the scheme.

Case studies

Using Asset Backed Funding to optimise the sponsor’s regulatory capital requirements while maintaining covenant.

Using a letter of credit to justify a “Bespoke” approach to funding.

Using a Group Company Guarantee to provide mitigation for adverse covenant effects of an M&A.

Using a range of contingent funding options to facilitate an appropriate investment strategy by assessing member outcomes in the context of covenant and funding.

Leveraging letters of credit to mitigate private equity risk

Negotiating profit sharing mechanisms and negative pledges to support refinancing and Covid-19 contribution deferrals