With the recent downgrades issued to several banks by Moodys and S&P in August, as well as the recent banking turmoil which occurred earlier this year, and the flurry of assignment activity in the market, lenders and borrowers alike have become increasingly focused on deposit accounts.
In a typical subscription credit agreement (each, an SCF), the relevant fund entities (the Sponsors) are required to deposit capital call proceeds (the Collateral) into a collateral account (the Collateral Account). For banks located in the United States where such Collateral Accounts are held, perfection and the ability to foreclose on the Collateral Accounts are typically governed by a deposit account control agreement (DACA), which is typically between …
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