EB5 Investors Magazine "Top 25 Awards Edition" Volume 8 Issue 1 - Page 50

TOP CORPORATE AT TORNEYS JACKIE PRESTER CORPORATE ATTORNEYS EB5 INVESTORS MAGAZINE J ackie Prester is a shareholder in the Memphis office of Baker Donelson Bearman Caldwell & Berkowitz, P.C., with 25 years of experience in the corporate and securities practice areas. Prester is the practice group chair of the firm's Financial Services Transactions practice group. She has particular experience advising clients on securities issues relating to the EB-5 immigrant investor program. This experience includes helping clients draft private placement memorandums, negotiating agreements with broker-dealers and other securities professionals, and advising on securities compliance issues. WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? connection with negotiating the terms of intercreditor agreements between the senior lenders and EB-5 lenders. Senior lenders are often not aware of some of the restrictions with EB-5 loans or are not receptive to allowing provisions that are important from an EB-5 perspective. HOW ARE YOU HANDLING THE ISSUE OF REDEPLOYMENT? In 2020, USCIS clarified important parameters for redeployment. This new guidance has led to changes in how we disclose redeployment risks in offering memorandums and operating agreements for the NCE. Since the guidance effectively applies retroactively, we are also busy advising our clients how best to navigate through this new guidance as it is applied to current and past redeployment decisions. We've seen a number of projects undergo timing delays or difficulties due to COVID-19. With these delays and difficulties, the managers of EB-5 entities are sometimes placed in difficult situations in deciding whether to fund projects with EB-5 funds or in agreeing to deferrals in repayment terms. There are also challenges when project owners refinance senior debt in BRUCE ROSETTO B ruce C. Rosetto represents private and public companies, private equity funds and investment banks. Rosetto has broad experience in public company securities work, private placement financings, corporate governance and alternate assets. His practice focuses on entrepreneurs and small-to-middle market public companies throughout the U.S. in a variety of industries, including life sciences, biotech, banking, real estate, environmental, manufacturing, technology, entertainment and many others. He also forms private equity funds and family offices and represents affiliated portfolio companies. In addition, he also advises clients on raising capital for and establishing regional centers and projects that qualify for the EB-5 program. WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? EB-5 has lost significant momentum in recent years, mostly due to retrogression and the inability of legislation from Congress 50 EB5 INVESTORS MAGAZINE CORPORATE ATTORNEYS EB5 INVESTORS MAGAZINE addressing some of the critical issues that have resulted in obstacles of having this program work as effectively as possible. The supply of investors throughout the world that desire to utilize the EB-5 program remains very strong. I have recently seen a very large demand of from developers re-evaluating EB-5 investment as part of their capital stack in hopes that Congress will act before the June 2021 deadline of the program. If they are right, EB-5 will be back stronger than ever. HOW ARE YOU HANDLING THE ISSUE OF REDEPLOYMENT? Redeployment remains a critical component of EB-5 offerings. In that regard, I typically include provisions in my offering documents that permit redeployment, subject of course to compliance with all USCIS regulations, to allow the borrower to use the proceeds of a sale, disposition or refinancing of its project for a new project; provided that (i) the new project is of the same quality and caliber (and no more risky) than the exiting project; (ii) the collateral to the lender is of equal or better quality than the existing collateral; and (iii) otherwise acceptable to lender in its commercially reasonable discretion.