SovereigNET - Fletcher Network for Sovereign Wealth and Global Capital

Entry into US Credit Markets by Sovereign Wealth Funds and Enterprises Controlled by Sovereign Wealth Funds

by Sean P. Mahoney and Eric S. Yoon


Recent developments have brought the structure of commercial lending platforms into sharp focus. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) imposes new restrictions and requirements on foreign banking organizations that are bank holding companies or are treated as bank holding companies under US law. Meanwhile, collateralized loan obligation funds, as well as mutual funds that invest in commercial loans and loan participations, signal an active commercial credit market, with intense investor interest in exposures to quality commercial loans. At once a US commercial lending platform is highly desirable yet carries significant barriers to entry, particularly for non-US lenders.