CRE NAV Facilities, Part 1: Structural Considerations for Equity Collateral
This is the first in a two-part series on net asset value credit facilities backed by a commercial...
Legal Update Archive
LEGAL UPDATES
Chasing Waterfalls: Priority, Enforcement, and Lender Protections
This is the second in a two-part series on waterfalls in syndicated and private credit. This Legal Update...
The ABCs of Credit Agreement Waterfalls
In corporate loan agreements, a waterfall provision – often called a “priority of payments” clause – specifies the order in which incoming payments or proceeds are applied to outstanding obligations. In this Legal Update, we examine the mechanics of waterfall provisions under US law, including a typical waterfall structure, application mechanics in ordinary course and default scenarios, and a checklist for lenders reviewing waterfall language.
Day-1 Preferred Equity for Horizontal Rated Note Feeders
The standard Day-1 Equity commitment structure works well for vertical strip rated note feeders (“RNFs”), but it can disrupt the negotiated tranche waterfall in horizontal strip structures. This Legal Update proposes a preferred equity alternative that preserves investor priority, maintains ratings neutrality, and provides lenders with an enforceable, borrowing base-eligible commitment (“Day-1 Pref”).
Collateral Sales Under Article 9: Lessons for Partner Loan and Investor Loan Programs
Commercial Reasonableness, Notice Requirements, and the 10-Day Safe Harbor Introduction Partner loan programs and investor loan programs are...
Payment-In-Kind Interest in Fund Finance Transactions
Payment-in-kind interest (“PIK interest”) is the concept of deferring interest owed by a borrower under a credit facility to a later date. Instead of making regular cash interest payments to the lender in the ordinary course, the borrower can elect to satisfy interest payments by incurring additional debt under the facility and reclassifying interest owed as principal loan obligations.
Lien vs. Payment Subordination in Fund Finance
Introduction In the evolving fund finance market, understanding the nuances of debt priority is more critical than ever,...
Evolving Lender Landscape in Fund Finance
Overview The fund finance ecosystem is undergoing a transformative shift. What was once a predominantly bank-dominated market has...
Sponsor-Arranged Investor Loan Programs
Introduction Large family offices and institutional investors are increasingly utilizing NAV loans on their alternatives holdings as a...
Mayer Brown Introduces FundFinance.com
Over the past 15 years, we’ve published more than 150 Legal Updates on the fund finance market. Our updates have covered just about every angle, including provisions so niche you’d never think they’d matter—until they do. Individually, each of those updates was written for a moment in time; a response to a market development, a structural innovation, or a legal question that practitioners were actively working through. Collectively, they form something more than that.