United States:
Remmel Comments On NAV Loan Risks
03 August 2023
Pryor Cashman LLP
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Pryor Cashman Partner Lawrence Remmel, chair of the Banking +
Finance Practice and a member of the Corporate Group and Investment
Management Practice, spoke with Private Debt Investor
about net asset value (NAV) borrowing and the risks to funds that
use NAV for financing.
In "NAV finance: 'A huge and growing area,'"
Larry notes that:
...the risk that funds that engage in NAV borrowing will
have to redo their valuations is very low. Banks provide a good
check on the funds, with any downside risk reflected in their
initial valuations and the borrowing base provided, he says. Remmel
does not expect a wholesale repricing of these loans. "When
they're under stress, they will be seen to be
conservative."
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