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03july

July/August 2003


Vol. 1 No. 7
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ABF Journal, Jul/Aug 2003
July/August 2003

ABF Executive Roundtable: Painting a Bright Industry Future

Wells Fargo Foothill: Evolution Through Innovation
By Scott R. Diehl

Over the last decade, Wells Fargo Foothill — formerly Foothill Capital — has grown dramatically, and now manages over $12 billion of loan commitments that earn returns that compare favorably to industry averages. In the following article, Scott Diehl discusses the guiding principles that have enabled the company to grow and change with the demands of the marketplace. (Ref # COMP005)

ABLs & Turnaround Professionals:Working Together to Create Liquidity and Provide Value
By Howard Brod Brownstein, Contributing EditorAsset-based lenders and turnaround professionals work together to create liquidity and value for companies “in transition”. Both are important factors in the corporate renewal process, and so an understanding of what turnaround professionals expect should prove useful to success in asset-based lending. (Ref # TM014)

Basel II Accord: Its Potential Impact on Corporate Lending
By Richard Coffman

The structure of the newest Basel II proposal issued on April 29th is the same as in the prior proposals, with “pillars” covering minimum capital requirements, the supervisory review process and market discipline. Banks would be well served by considering the potential consequences as the implementation date draws near.
(Ref # LGL017)

Why More of Today’s Leveraged Buyout Transactions use ABL
By James G. Connolly

As the total U.S. leveraged buyout transactions during the first quarter of this year have reached $14.5 billion, this recent movement suggests that merger and acquisition activity is gathering steam. For a variety of reasons, the financing to fuel these deals increasingly will include asset-based loans. (Ref # IND039)

ORIX Business Credit: Poised for Continued Growth
By Thomas L. Hidder

Just a few short years ago, borrowers sought financial partners who could offer reliability and flexibility in structure with pricing ranking third. In today’s marketplace, the opposite often holds true. Thomas Hidder, group president of ORIX Financial Services Business Credit Group discusses how his company has poised itself for continued growth. (Ref # COMP006)

ABF Executive Roundtable: Painting a Bright Industry Future
By Kevin Riordan

“We do have a good story to tell.” This was perhaps the most representative statement emerging from ABF Journal’s recent interviews with 17 top executives of asset-based lending firms nationwide. The good story they told is far more nuanced than the simplistic axiom that ABLs do well when times are tough. (Ref # IND038, MYS001)

Institutional Investors Help Carry the Load
By Steven Miller and Chris Donnelly

During the first five months of 2003, five issuers tapped institutional accounts for $2.1 billion of asset-based loans, an increase of 275% from the same period in 2002 and well beyond 2002’s total of $1.6 billion. By industry estimates, the institutional share of the market is 14%, compared to 6% in 2002 and less than 5% in 2001.
(Ref # CAP008, CRD005)

Factoring & ABL Software: It’s Time to Update — Now What?
By Debora Musikar

A software provider’s customer care attitude represents a critical component of a successful relationship. Customer care is as crucial as the software’s potential: you are not just buying a product from the provider, but rather a long-term partnership with the provider. (Ref # TECH004)

Where Have All the Salespeople Gone?
By Stephen K. Troy

While factors have an enticing product, factoring professionals can never lose sight of the importance of trained salespeople and, at the same time, must nurture their relationships with the brokers who define the new age of sales in the industry. (Ref # GEN002)
Columns

A PROFILE OF SUCCESS
A Hands-on, Supportive Approach Makes the Grade
A Profile of William A. Kosis, President and CEO of PNC Business Credit

Bill Kosis, president and CEO of PNC Business Credit is always seeking a balance – a win-win situation where PNC brings value to the client, and the client brings value to PNC. And as one colleague puts it, “He’s there whenever and wherever you need him to help the client cross the finish line.” (Ref # EXEC008)

PUTTING IT TOGETHER: ANATOMY OF ABL TRANSACTIONS
GE Corporate Lending & Ispat Inland:
Industry Knowledge Paves Way For Success

By Thomas Sullivan and Mark Smith

When the nation’s fourth largest integrated steel producer needed to generate additional liquidity to fund a critical operational situation, they turned to a lender with deep industry knowledge. GE Corporate Lending found a way to “open up” the borrower’s asset base through a highly creative asset valuation approach. (Ref # DLS007)

LEGAL EYES
Revised Article 9 — Filing Location Change Is Welcome Improvement
By Ian R. Scheinmann

This article focuses on certain amendments to Article 9 relating to the required place of filing for non-fixture financing statements and the need to change the filing location of certain previously filed financing statements in order to ensure that they are in compliance with revised Article 9. (Ref # LGL018)

TURNAROUND CORNER
What Do Thoroughbreds, Pom-Poms & Nuclear Subs Have in Common?
By Randall Katz

Whether a business serves the horse racing, cheerleading, or nuclear submarine industries, crisis situations require many of the same skill sets to achieve a successful outcome. A successful out-come or “win” needs to be defined at the beginning of every engagement and while no two engagements are completely alike, improving cash flow, enhancing the value of the business and maximizing returns are objectives in all distressed situations. (Ref # TM015)

FACTORING FOCUS
The Art of Financing Today’s Staffing Firms
By James Rothman

To know what it takes to successfully finance temporary staffing companies, one has to understand what makes the $56 billion temporary staffing industry tick. A look back at the last several years provides insight into the industry, its relationship to the economy and job market, and how staffing firms and lenders forge successful financial partnerships. (Ref # FAC026)

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