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November/December 2013

Capital Markets
Vol. 11 No. 8
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2013 ABL Volume Weighed Down by Refinancings - At just over $57 billion, Q1/13-Q3/13 ABL volume is comparable to the same period last year. However, less than 21% of ABL lending this year represents new loan assets. In a trend consistent with that of the broader leveraged loan market, lending during both years was heavily weighted toward refinancings, as issuers push out maturities and reduce spreads on existing credits.
What’s in Store for 2014? Challenges and Opportunities of the Year Ahead - Longtime ABF Journal contributor Lisa Miller talks to five industry heavyweights about what’s ahead for asset-based lending in 2014. The lenders discuss interest rates; how increased bank liquidity has brought new players, higher hold limits and fiercer competition; Dodd-Frank and more.
Downturn Plus Four Years — State of the Capital Markets - Contributing editor Howard Brod Brownstein talks to five leading ABL capital markets players about market conditions now that the official end of the downturn is four years behind us. All agree that market conditions are extremely competitive — comparable to before the financial downturn — and that this trend will continue for the foreseeable future.
Rising Tide of Liquidity Lifting All Boats… As Regulatory Environment Evolves, ABL Growth in Europe Will Accelerate - Trimingham’s Hugh Larrett-Smith traces our asset-based lending roots back to the late 1800s and early 1900s when Paul Warburg was a transatlantic ABL “colossus.” Since then he sees an increasing willingness amongst UK and some European participants to work together towards the dream of achieving a true Pan-European syndicated loan market.
Through Good Times and Bad… Appraisals Have Largely Held Since the Dark Days of ’08 & ’09 - Michael McGrail, managing director of Tiger Group, says the ABL sector has enjoyed a market in which appraisals continue to be safe and accurate, in good times and bad.
Staying Relevant as a Workout Specialist… Lessons from the Great Recession Demonstrate How Workout Officers Can Stay Visible and Vital - Workout officers gained essential wisdom during the Great Recession and previous down cycles; now they hold a wealth of valuable information for internal constituents and portfolio borrowers.


Melding ABL & Equipment Finance… At JPMorgan Chase Sharing Similar Goals, Challenges & Opportunities - Heading Chase's ABL unit for nearly 12 years, John Goldthorpe now has the equipment finance group under his wing and is leading his team in creating a strategic dialogue between the two businesses in order to serve as a comprehensive resource for their clients' growth plans.


Forging Strong Growth — Sterling Merges with Provident to Expand Reach - In April 2013, Provident New York Bancorp and Sterling Bancorp announced they were to merge in a transaction valued at $344 million. As Sterling's CFO Howard Applebaum explains to ABF Journal contributing editor Howard Brod Brownstein, the ultimate goal of the union is to expand product offerings, footprint and client base — while maintaining the high level of customer service for which both banks are known.



Deconstructing Clients’ IRS Liabilities — Know When to Hold ‘Em, Walk Away or Run - Lenders need not panic when dealing with customers facing a federal tax liability. As Jason Peckham explains, situations involving the IRS often can be resolved by negotiating a reasonable repayment arrangement.


Partnering with an SBIC… An Opportunity for an ABL to Provide Customers with Incremental Financing - F.N.B. Capital Partners’ Joseph Bute and Tyson Smith explain the rationale behind the formation of an SBIC and how partnering with an SBIC fund offers asset-based lenders a way to provide their customers with cash-flow financing beyond the underlying collateral.


Chapter 7 Trustee Elections… A Bankruptcy Tool for Greater Creditor Accountability - Making the Chapter 7 trustee accountable to unsecured creditors will instill more confidence in the post-bankruptcy process where unsecured creditors are often left with the perception that bankruptcy courts operate solely for the benefit of professionals. Jeffrey Wurst and Michael Amato, both of Ruskin Moscou Faltischek, say that by making the trustee more accountable, the process will also move at a quicker pace.


Orchard Supply Case Study… A Lesson in the Creative Use of DIP Financing - The intricacies involved in the Orchard Supply bankruptcy provide guidance to debtors and creditors about the need to balance the competing interest of lenders, purchasers and stakeholders when it comes to debtor-in-possession financing.


FinalCut: Banks Seen at Risk Five Years After Lehman Collapse - ABF Journal illustrator Jerry Gonzalez provides his take on a Bloomberg report finding that, five years after the Lehman collapse, Dodd-Frank and new international capital rules haven’t made the U.S. banking system safe enough or kept banks from being too big to fail.

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