Structuring NAV Financing for Private Funds: LTV Covenants, Multitier Transactions, Intercreditor Issues
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE webinar will examine the structuring and documentation of NAV financing for private funds. The panel will discuss LTV calculation and default triggers, first/second lien structures, UCC perfection, and intercreditor arrangements with multiple lenders.
Outline
- NAV vs. subscription facilities: when each is most useful in the fund lifecycle
- LTV: central to NAV defaults and remedies
- Determining value for portfolio assets as opposed to "fund of funds" investments
- Adjustments to value during the loan term
- LTV default triggers and remedies
- Borrowing entity structures and UCC perfection in NAV collateral
- Senior-subordinate lien structures
- Intercreditor agreements in multiple lender transactions: key provisions
Benefits
The panel will review these and other questions:
- How do valuation methodologies vary between a fund that invests directly in portfolio companies and one that invests in other funds?
- What is the standard borrowing entity structure for a NAV loan?
- How should the lender perfect its security interest in the NAV loan collateral?
- What are a NAV lender's remedies after an LTV default? How about a second lien lender?
- When is an intercreditor agreement necessary, and what are the issues to address?
Faculty

LeAnn L. Chen
Partner
Haynes and Boone
Ms. Chen represents banks, multinational corporations, hedge funds, mutual funds, private equity funds, and... | Read More
Ms. Chen represents banks, multinational corporations, hedge funds, mutual funds, private equity funds, and broker-dealers in a wide range of business transactions, including syndicated financing, cross-border investments, margin lending, prime brokerage, swap transactions, securitizations, and DIP financing, etc. She regularly advises clients on issues related to secured transactions, securities credit regulations, and cross-border investments.
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Adam D. Summers
Partner
Fried Frank Harris Shriver & Jacobson
Mr. Summers focuses his practice on credit and capital markets transactions. He has extensive experience advising... | Read More
Mr. Summers focuses his practice on credit and capital markets transactions. He has extensive experience advising investment banking clients, debt funds and other lenders throughout the deal process, from the early stages through closing and funding. He also has represented various corporate clients on a wide range of financing transactions. Additionally, Mr. Summers represents banks and commercial lenders in both syndicated credit facilities and high-yield bond financings related to leveraged buyouts and other acquisitions and provides ongoing counsel to agents and arrangers under those facilities. He assists clients in understanding and evaluating existing debt capital structures for targets of acquisitions and has particular expertise negotiating commitment letters in connection with acquisition financings. In addition, Mr. Summers has worked on numerous subscription credit facilities for private equity and debt funds.
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Craig S. Unterberg
Partner
Haynes and Boone
Mr. Unterberg concentrates his practice in the areas of representing borrowers and lenders in secured and... | Read More
Mr. Unterberg concentrates his practice in the areas of representing borrowers and lenders in secured and unsecured lending and structured finance transactions, including margin stock lending, private equity and hedge fund financing, syndicated financings, mergers and acquisition financings, and distressed debt transactions. In addition, he provides extensive regulatory advice on margin lending issues.
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Ariel Zell
Partner
Fried Frank Harris Shriver & Jacobson
Mr. Zell represents financial institutions, private equity sponsors and public and private clients in a wide variety of... | Read More
Mr. Zell represents financial institutions, private equity sponsors and public and private clients in a wide variety of debt financings and corporate transactions in connection with fund formations, leveraged acquisitions, recapitalizations, restructurings, private debt placements and other securities offerings. His practice focuses on fund financings and other types of investment fund and corporate leverage.
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