For the last few months, it seems that every day we are seeing additional SPACs seeking to extend their time to complete a business combination or modify their pre-existing extension terms to reduce the amount required to be deposited in trust account. These extension votes have historically required (i) significant deposits of additional cash into a SPAC's trust account, or (ii) transfer of a significant number of founder shares, and still resulted in a significant number of redemptions.  In the last few weeks, however, it seems as though more SPACs are able to keep a significant portion of the funds in trust even with a small (or no) cash commitment and no transfer of founder shares.

While far from a scientific study of these trends, from personal experience, it does seem as though the higher interest rate environment has resulted in SPAC investors requiring less money and/or shares from sponsor groups in order to extend the life of a SPAC. Whether this trend continues for the rest of the summer and into the fall is anyone's guess, but sponsor groups with enough time available may want to consider exploring how many redemptions there would be in the absence of any contributions to the trust account or transfers of founder shares. As in any extension process, management teams should keep in mind listing requirements and make sure that their SPAC does not fall below applicable standards.