Fund Information. Private Debt Investment Detail.

Purpose

Since Private Debt is simply an alternative type of financial instrument through which a fund may be exposed to a portfolio company, the basic information that should be provided for a Private Debt instrument is very similar to that information that would be disclosed for a Private Equity Portfolio Asset.

In addition to the Requirements listed on Portfolio Asset Detail page, for each Private Debt investment in the fund the following additional matters should be disclosed as part of the one to two page reports:

Basic Information

Additional possible disclosures

Any credit rating applicable to the company.

Fund’s Investment

Requirements

• The name of the Private Debt instrument (e.g. Term Loan A);
• The date of the initial investment in the Private Debt instrument;
• Whether the investment was acquired through an origination process or a secondary trade;
• The notional amount invested and the price as a percentage of par value paid at the date of the original investment;
• The notional amount outstanding and separately the amounts of all accrued interest as of the reporting date;
• The implied credit spread or yield based on the price paid at the date of the original investment;
• Any origination or administrative fees received;
• The economic terms of the Private Debt instrument:
  – Origination date and/or trade date;
  – Contractual maturity date;
  – Coupon (including specifics about base rate, spread over base rate, margin ratchets, etc.);
  – Interest period;
  – Amortisation schedule and/or any scheduled amortisation payments and dates;
  – Prepayment provisions;
  – Key financial covenants;
  – Any unique features such as exit fees, cash flow sweeps, conversion options, fees on unfunded portion, associated warrants and equity features etc.

Trading and Financial Overview

Requirements

• Capital structure of issuer, including the terms and rights of other financial instruments in the issuer’s capital stack, and any relevant leverage and interest coverage ratios;
• Trading update – particularly as it relates to any cash flow sweeps or margin ratchets;
• Covenant compliance update;
• Any default (e.g. non-payment of interest).

Additional possible disclosures

Equity cushion

Valuation

Private Debt instruments should be reported at Fair Value in accordance with IPEV Guidelines.

Requirements

• Fair Value expressed in nominal terms and as a percentage of par value (specifying whether pricing is on a ‘clean’ or ‘dirty’ basis convention);
• Implied spread or yield based on reported Fair Value;
• Valuation methodology utilised;
• Instrument-level credit ratings (if available).