Collateral Accounts in NAV and Subscription Facilities: Control Agreements; UCC Perfection Considerations
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE webinar will discuss the importance of single-purpose collateral accounts in subscription and net asset value (NAV) financing facilities. The panel will review what constitutes “control” of collateral accounts under the Uniform Commercial Code (UCC) and will highlight best practices for perfecting and enforcing a lender’s interest in collateral accounts via loan documents, control agreements, security agreements and financing statements.
Outline
- Financing the fund lifecycle
- Initial stages
- Later stages
- Subscription facilities
- Collateral
- Recovery
- NAV structures
- Collateral structures
- Financial covenants
- Loan-to-value ratio
- Asset pool
- Valuation of underlying assets
- Remedies
- Control agreements
- Deposit accounts vs. securities accounts
- Perfection
- Custodian liens
- Indemnification
- Account issues in practice
Benefits
The panel will address these and other key issues:
- How do collateral account structures differ between subscription and NAV financing facilities?
- Why does “control” with respect to collateral accounts matter under UCC 9-104 and how can lenders obtain “control” and perfect their security interests in deposit and securities accounts?
- Does a secured party have “control” of the collateral if the depository bank/securities intermediary can refuse to comply with a secured party’s instructions?
- Does a security interest held by a depository bank or securities intermediary have priority over a security interest held by another secured party?
Faculty
Leah Edelboim
Partner
Cadwalader, Wickersham & Taft
Ms. Edelboim has more than a decade of experience in fund finance transactions, having worked on some of the largest... | Read More
Ms. Edelboim has more than a decade of experience in fund finance transactions, having worked on some of the largest deals with the biggest syndicates. She advises banks and other financial institutions on syndicated, club and bilateral subscription credit facilities, as well as NAV facilities, hybrids, management fee lines, GP Financings, Capital Relief Trades and other, often bespoke, fund finance transactions. With significant experience in both borrower- and lender-side representations, Ms. Edelboim has often been called upon to help clients devise creative structures that reflect evolving regulatory requirements and investor trends. She also has deep experience advising ratings agencies and providers of financial guaranty and other insurance products in fund finance transactions. Ms. Edelboim’s industry leadership is reflected in her frequent role as faculty member, panelist, speaker and author on cutting-edge fund finance issues.
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Matthew Kerfoot
Partner
Proskauer Rose
Mr. Kerfoot focuses principally on fund finance and structured finance transactions. He has held leadership positions... | Read More
Mr. Kerfoot focuses principally on fund finance and structured finance transactions. He has held leadership positions in both banking and law in the fund finance industry for over two decades and is a frequent speaker and author on various fund finance matters. Mr. Kerfoot advises on a broad spectrum of private equity and private credit financing and liquidity solutions. He counsels both borrowers and lenders on subscription lines, NAV-based facilities and preferred equity financings, as well as asset-based middle market loan and other private credit portfolio financings. Mr. Kerfoot also structures and advises on both GP-led and LP-led collateralized fund obligations, collateralized loan obligations, insurance securitizations, and other similar securitized and structured products and derivatives. Prior to joining the firm, he was a Managing Director in the Credit and Structured Financing group at Société Générale, where he structured and marketed collateralized financings for portfolios of private equity secondaries, middle market loans, broadly syndicated loans and senior and mezzanine tranches of CLOs and other securitized products. Prior to that, Mr. Kerfoot was the Americas Head of Fund Finance at UBS AG.
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Brent Shultz
Partner
Haynes and Boone
Mr. Shultz has successfully negotiated and closed billions of dollars of complex debt financings for his clients.... | Read More
Mr. Shultz has successfully negotiated and closed billions of dollars of complex debt financings for his clients. He counsels clients in connection with fund finance, including capital commitment-secured credit facilities, NAV credit facilities, hybrid subscription facilities, management lines of credit, general partner financings and employee co-investment facilities. Mr. Shultz is a noted voice in the fund finance arena, has published numerous articles on fund finance topics and has served as a panel moderator at the Fund Finance Association’s Global Symposium. He leverages this expertise and thought leadership to help his clients navigate the most complicated and cutting-edge fund financing structures.
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