Our leading securities practice makes us a top choice for private equity and other sponsors of Business Development Companies (BDCs) and for underwriters and advisers to BDCs. BDCs, which are specialized investment funds, are becoming an increasingly important source of capital for small and middle market companies. BDCs elect to be subject to certain provisions of the 1940 Act and benefit from favorable tax treatment. Our leading securities practice, combined with our knowledge of the 1940 Act, the Advisers Act and the tax considerations applicable to BDCs, make us a leading choice for private equity and other sponsors of BDCs and for underwriters and advisers to BDCs.
We advise clients on a full range of disclosure, governance and regulatory matters relating to the federal securities laws, including the 1940 Act and the Advisers Act. We help clients in all phases of their operations, including disclosure, compliance, risk management, record-keeping and oversight by independent directors. We advise BDCs on best practices regarding compliance policies and procedures. In addition, we provide practical advice on matters relating to capital structure, including compliance with the asset coverage test, the issuance of securities below net asset value, transactions with affiliates, the valuation of securities, social media and related matters.
Our financial transactions group and our bankruptcy and restructuring group also provide support for our BDC clients. Our financial transactions group works with BDCs to negotiate and establish credit facilities. We also have extensive experience structuring and negotiating investments in BDC portfolio companies. This includes first and second lien loans, unitranche and other first out/last out loans, covenant-lite loans, PIK debt, subordinated loans, debtor-in-possession loans, high-yield debt securities, convertible debt, preferred equity and other mezzanine financings. Our bankruptcy and restructuring group advises BDCs and other lenders in connection with distressed investments, including restructurings, out-of-court workouts, foreclosures and bankruptcy proceedings.
Finally, our tax department is an integral part of the team advising BDCs. Our tax department has significant experience with both private and public BDCs. In addition, members of our tax team have decades worth of experience with the taxation of regulated investment companies that are eligible for favorable tax treatment. This experience is of particular significance to public BDCs since they typically elect to be treated as regulated investment companies.