Structuring Credit Facilities for Private Equity Funds: Subscription, NAV and Hybrid Loans

Recording of a 90-minute CLE webinar with Q&A

Conducted on Thursday, December 7, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide finance counsel with the tools to structure credit facilities for private equity funds, including subscription and net asset value (NAV) based facilities and hybrids that combine aspects of both. The panel will contrast the documentation and collateral for subscription vs. NAV loans and review additional issues to address when underwriting and documenting a hybrid transaction.


Private equity funds often use subscription-backed credit facilities as a bridge to capital calls or other permanent asset-level financing. As funds mature beyond their investment or commitment periods, they then seek NAV credit facilities with availability based on the underlying portfolio investments of the fund.

These two phases of financing have historically been distinct transactions, but borrowers and lenders are now exploring hybrid facilities which provide lenders with recourse to both uncalled capital commitments (the typical collateral under subscription facilities) and underlying investment assets (the traditional credit support under NAV facilities). Counsel must have a thorough understanding of subscription and NAV credit facilities, and how each may figure into a hybrid structure.

Hybrid facility lenders need to underwrite the investors providing collateral support and a pool of known and potentially unknown portfolio assets. The collateral package for the hybrid facility might include pledges of a general partner’s rights to unfunded capital commitments; deposit accounts into which the fund’s investors are required to fund their contributions; equity interests in the holding companies through which the fund holds its underlying investments; and equity interests relating to the underlying investments (if permitted).

Listen as our authoritative panel discusses the different objectives of subscription and NAV credit facilities, and the nuances of combining the two into a hybrid credit facility. The panel will also discuss UCC perfection issues with regard to the various interests pledged.



  1. Financing lifecycle of a private equity fund
  2. Subscription facilities
  3. NAV facilities
  4. Hybrid facilities
  5. Types of collateral—UCC perfection


The panel will review these and other key issues:

  • What is the collateral for subscription facilities and when are they most useful in the life of the fund?
  • When should NAV facilities be created and how are adjustments made for underlying assets of a fund?
  • How should a hybrid facility be structured to address both subscription and NAV underwriting?
  • What are the UCC considerations for each type of collateral?


Barnett, Zachary
Zachary K. Barnett

Mayer Brown

Mr. Barnett primarily represents lenders and borrowers in connection with various real estate, private equity, debt,...  |  Read More

Bundrant, Todd
Todd N. Bundrant

Mayer Brown

Mr. Bundrant is a partner in Mayer Brown’s Banking & Finance practice. He represents financial institutions,...  |  Read More

Richardson Knox, Ann
Ann Richardson Knox

Mayer Brown

Ms. Knox has spent her entire career structuring complex leveraged financings to US and global private funds, sponsors...  |  Read More

Stephenson, Leon
Leon Stephenson

Partner, European Head of Funds Finance
Reed Smith

Mr. Stephenson is a member of the Financial Industry Group and Head of Funds Financing in London. He and his team work...  |  Read More

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