Navigating Suspended Distributions


25 minutes

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Navigating Suspended Distributions

About this podcast

🏢 In this episode, we’re diving deep into a crucial aspect of investing: navigating challenging scenarios when a sponsor suspends distributions. Join us as we explore strategies such as reforecasting, understanding pref equity refinancing, and the significance of ongoing sponsor activities. Learn how to verify the status of your investment, assess the sponsor’s standing, and make informed decisions about exiting a deal. Gain insights into the role of rescue funds in today’s market. Don’t miss out on this essential discussion for every investor’s playbook!

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Key takeaways

  1. Understanding the Reasons: It’s crucial to understand why a sponsor has suspended distributions. This could be due to various factors such as economic downturns, operational issues, or strategic decisions. Understanding the underlying reasons can help investors assess the potential impact and make informed decisions.
  2. Assessing Impact and Risks: Investors should carefully assess the impact of the suspension on their investment portfolio and financial goals. This includes evaluating the financial health of the sponsor, the likelihood of distributions resuming, and any contractual obligations or recourse available to investors.
  3. Diversification and Risk Management: Diversification is key to mitigating risks associated with suspended distributions. Investors should consider spreading their investments across different sponsors, asset classes, and strategies to reduce the impact of any single suspension. Additionally, having a robust risk management strategy in place can help investors navigate such challenging scenarios more effectively.