A common trope in the PE industry is that funds tend to simply transfer assets back and forth between each over the years while realizing some value along the way. That dynamic nature of PE assets – when they are acquired, sold or modified (e.g., via add-on acquisitions) – can have a material trickle-down effect on a fund’s net asset value (NAV) facility. Sponsors need to consider those possibilities when negotiating the covenants and requirements for the fund, along with how they communicate developments with lenders. Those are among the topics explored in a recent program sponsored by Strafford CLE Webinars featuring Haynes and Boone partner LeAnn L. Chen and Fried Frank partner Adam D. Summers. This second article in a two-part series outlines a number of key negotiating points for NAV facilities, including collateral releases, due diligence processes and transfer restrictions. The first article considered where NAV facilities fit into a fund’s lifecycle, the development of hybrid facilities, the importance of the loan-to-value (LTV) ratio, ways the LTV is calculated and various LTV triggers that commonly arise. For additional insights from Fried Frank attorneys, see our two-part series on the SEC’s risk alert on compliance: “Limited Staffing, Marginalized CCOs and an Overall Lack of Resources at Fund Managers” (Jan. 26, 2021); and “Inadequate Annual Reviews, Poorly Implemented Policies and Other Key Takeaways” (Feb. 2, 2021).