N.J. Admin. Code § 17:16-23.2

Current through Register Vol. 56, No. 24, December 18, 2024

Section 17:16-23.2 - Permissible investments

(a) Subject to the limitations contained in this subchapter, the Director may invest and reinvest the moneys of any eligible fund in private credit investments in any of the following ways:

1. Invest in direct bank loans provided that the borrower:

i. Is not in default as to the payment of principal or interest upon any of its outstanding obligations. Subsequent to purchase, if the borrower defaults, the loans do not have to be sold; and

ii. Has shareholder's equity of at least $ 200million. Subsequent to purchase, if shareholder's equity falls below $ 200million, the investment does not have to be sold;

2. Invest in separate accounts, funds-of-funds, commingled funds, co-investments, and joint ventures that primarily invest in private credit investments; provided that the further provisos contained in N.J.A.C. 17:16-69.9have been met;

3. Purchase the common stock of an entity that primarily invests in private credit investments, and whose stock is traded on a securities exchange or over-the-counter market or offered and sold through a private placement; and

4. Purchase exchange-traded funds traded on a securities exchange or the over-the-counter market that primarily invest in private credit investments. For the purposes of this subchapter, exchange-traded funds shall be considered as common stock in determining all applicable limitations contained in this subchapter.

(b) In addition to (a) above, the Director may:

1. Exercise the rights or conversion privileges of any security acquired under this subchapter;

2. Retain any distribution received as a result of a corporate action or distribution by a private credit investment, even if such distribution does not meet the requirements of this subchapter;

3. Purchase the preferred stock, whether convertible or not, or rights of an entity, the common stock of which qualifies for investment under this subchapter;

4. Purchase the convertible debt issue of an entity, the common stock of which qualifies for investment under this subchapter; and

5. Purchase stock in new public offerings of entities that primarily invest in private credit investments.

(c) Notwithstanding the restrictions in this subchapter, the Council may approve the purchase of private credit investments on a case-by-case basis.

(d) Nothing in this subchapter shall preclude the Director from investing the monies of any eligible fund directly in individual collateralized notes and mortgages pursuant to N.J.A.C. 17:16-19 and individual mortgage-backed senior debt securities pursuant to N.J.A.C. 17:16-58.

N.J. Admin. Code § 17:16-23.2

Amended by 50 N.J.R. 215(b), effective 1/2/2018

Amended by 53 N.J.R. 1857(a), effective 11/1/2021