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KPMG article: Unraveling timing and character of revolver net-back payments

A brief overview of revolving credit agreements and the economics of net-back transactions.

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April 7, 2025

The revolving credit facility has become an increasingly popular investment for credit-orientated private investment funds. This trend has been driven by the growing liquidity in the bank loan market, the attractive yields and security of credit investments generally, and the economics of so-called “net-back” transactions, which pair nicely with the desired return profile of these investment funds.

Read an April 2025 article* prepared by KPMG LLP professionals that gives a brief overview of revolving credit agreements (“revolvers”) and the economics of these net-back transactions and then attempts to unravel the timing and tax character of net-back payments—an inquiry that is not as straight-forward as it might first appear.

*This article appears in the Journal of Taxation of Financial Products (Volume 21 No. 4 2025) and is provided with permission.

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