Evolving Trends in NAV Facilities: Holdco Structures, Collateral, Credit Support, Loan-to-Value Ratios, Repayment Terms
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will provide an overview of the latest developments and trends in net asset value (NAV) financing loan structures. The panel will discuss the market conditions that have led to an increase in the number of NAV financings, the growing use of holding company (Holdco) loan structures, valuation and collateral support considerations, and loan repayment terms.
Outline
- Overview: current market conditions
- The evolution of NAV facilities
- Differences between NAV credit facilities and subscription-backed credit facilities
- Structure of NAV facilities
- Fund or portfolio company level structure
- Holdco structure
- LPAs and their impact on NAV financing facilities
- Key loan terms to consider
- Collateral considerations and asset-level financing
- Loan-to-value ratio
- Minimum assets/diversity of investment portfolio
- Covenants and events of default
- Advantages and disadvantages of NAV facilities
- Other issues and considerations
Benefits
The panel will address these and other key issues:
- What are the current market conditions that make NAV financing facilities attractive?
- How does a Holdco NAV loan structure work?
- What are the valuation and collateral considerations that must be addressed in the Holdco structure?
- What impact do LPAs have on a fund entering into a NAV financing facility?
- What are key loan terms to negotiate for borrowers and lenders when structuring a NAV facility?
Faculty
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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Corinne C. Musa
Partner
Akin Gump Strauss Hauer & Feld
Ms. Musa’s practice focuses on borrowers and alternative lenders in all aspects of fund financing ... | Read More
Ms. Musa’s practice focuses on borrowers and alternative lenders in all aspects of fund financing transactions, with a specific focus on subscription credit facilities, net asset value (NAV) and hybrid credit facilities. She also regularly represents clients on management fee and GP lines of credit and other financings throughout an investment fund’s structure. Ms. Musa has been lead counsel on many of the largest and most complex credit arrangements to funds affiliated with preeminent fund sponsors. She partners with clients to provide meaningful and practical advice across the spectrum of fund financing transaction. Additionally, Ms. Musa has experience advising on more general corporate finance transactions, including acquisition financings, and complex domestic and cross-border transactions.
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Sherri Snelson
Partner
White & Case
Ms. Snelson has extensive experience acting as lead counsel for lenders, private equity funds, and their portfolio... | Read More
Ms. Snelson has extensive experience acting as lead counsel for lenders, private equity funds, and their portfolio companies in connection with leveraged finance and fund/portfolio finance transactions. She is dual qualified in New York and England & Wales and practiced previously in the UK. Ms. Snelson has acted as lead counsel on hundreds of finance transactions that span a wide array of industries and jurisdictions throughout the Americas, Europe and Asia. Hers experience also includes advising investors and borrowers in connection with both in- and out-of-court debt restructurings, DIP financings, exit financings, 363 sales, English administrations and schemes of arrangements, and insolvency related matters in several European jurisdictions.
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