Private Debt Intelligence – 6/10/2019

Subscription Credit: Angel or Demon?

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Private capital funds are using subscription credit facilities – bridge loans made to fund deals in lieu of making capital calls – more than ever. Usage has jumped from 13% in pre-2010 vintages to over 50% of 2015 and 2016 vintage vehicles. But the industry remains divided as to whether they are a legitimate means of managing cash flow, or a cynical ploy to artificially boost IRRs.