May 2003
Syndication Market Booming

Credit Ratings… Sign of Growing Transparency in ABF Market
By Steven Bavaria

If the ABF market follows the trends in the larger loan market, we will probably see increasing opening of the market to loan investors. Since the new investors generally will be less familiar with the ABF market, they will require credit ratings and the additional transparency ratings provide. (Ref # CRD006)

Syndicated Loans: Fewer Lenders On the Dance Floor
By Susan GeorgeDue to recent consolidation among banks and lenders, there are fewer lenders to turn to in the syndication market even as the list of borrowers has grown. This has dramatically altered the risk picture. Having a full understanding of the critical elements of syndication can make a difference. (Ref # CAP003)

Second Lien Loans… The Right Fix at the Right Time
By Timothy C. Shoyer

A senior secured second lien works in tandem with an asset-based loan and provides a company with some liquidity at a time when other capital sources may be less accessible. Secured second liens have recently come into vogue and until the economy rebounds, they are here to stay. (Ref # LSP010)

As ABL Deals Get Bigger… Syndication Plays A Crucial Role
By Kevin Riordan

As ABLs are doing bigger deals, loan syndications a playing a crucial role for borrowers and lenders alike. Recently, ABF Journal interviewed a panel of eleven top executives from major banks and finance companies to discuss the state of loan syndications. (Ref # CAP004)

Mezzanine Financing: Bridging the Funding Gap
By Theodore H. Sprink

As mezzanine financing gains understanding and acceptance throughout the capital markets, it is proving to be a powerful resource for funding growth and provides lenders and borrowers alike a tool in bridging the funding gap. (Ref # LSP011)

Club Deals for the Middle-Market: A Rising Trend
By Sharon Davis Shaffer

Club deals, once a fixture in the world of large corporate finance, have downshifted to be increasingly popular in the middle-market as well. Recently, the industry has seen a trend in such deals into the $10 to $75 million range. The following article explores the circumstances that have given rise to this trend. (Ref # CAP005)

Stretching Out: Enterprising Lenders Fill Gaping Funding Void
By Daleep Akoi

Step aside those faint of heart, for a bold breed of lenders are bolstering the lending fortunes of companies that have been, well, abandoned. These touch-it-not issuers are not just getting a like-it-or-lump-it deal. They may, in fact, depending on certain conditions, have various borrowing options available to them. (Ref # CAP007)

Conflict of Interests? The Impact of Interpretation No. 46
By David Augustyn and William Sineni

FIN 46 presents a challenge to companies because determining whether an entity is a VIE requires extensive data about the entity that may not be readily available. Companies that intend to utilize VIEs will need to weigh the costs and benefits differently from the way they have in the past, and work with their lenders to determine the impact of FIN 46 on any transaction structure. (Ref # ACC002)

Lead Institutions: Poised to Deliver Unique Transaction Value
By Gerard M. Hanabergh

As interest in asset-based transactions is on the upswing, it is abundantly clear that the role of the lead institution — when ideally executed — is highly proactive, strategic and ongoing and creates critical value before and after the transaction closes. (Ref # CAP006)
Columns

A PROFILE OF SUCCESS
Plotting a Course for Business Growth
A Profile of Martin J. McKinley, President of Wells Fargo Business Credit

Spend just a few minutes with Wells Fargo Business Credit President Martin McKinley, and you’ll capture a sense of his down-to-earth, focused and decisive demeanor. McKinley has synchronized his business’ values with those of parent company Wells Fargo, to reach the ultimate goal of developing mutually beneficial long-term relationships for customers, employees and Wells Fargo. (Ref # EXEC006)

PUTTING IT TOGETHER: ANATOMY OF ABL TRANSACTIONS
Bank of America & Unisource: Maximizing Success in the Syndication Market
By Ernest Pelli

In today’s environment it is often the case that a financing predicated on a company’s asset base provides more leverage than one based solely on cash flows. As a result there has been a rise in the level of asset-based financings for financial sponsor transactions. This was the case in the financing led by Bank of America and Citigroup for the acquisition of Unisource Worldwide. (Ref # DLS005)

LEGAL EYES
Property Extinguishable in a Bankruptcy Sale
By Rudolph J. Di Massa, Jr., Esq. and Edward A. McMerty, III, Esq.

It is not unusual for businesses seeking to acquire assets to look for bargains in the bankruptcy arena. Such sales are attractive not only for the potential savings which they might offer, but also for the protections given to such purchases by certain provisions of the Bankruptcy Code. (Ref # LGL013)

TURNAROUND CORNER
EBITDA: How It Affects Your Borrower Cash
By John Calabrese and Brigid A. Rafferty

Earnings Before Interest Taxes and Depreciation. Sounds simple, right? This is not always the case. Lenders, investors, management, and other interested parties use EBITDA as one of the key measures of financial health. But how reliable is it? (Ref # TM012)

FACTORING FOCUS
Eliminating the “What? Me Factor?” Syndrome
By Robert C. Schmidt

When all is said and done — factoring works! Therefore, how does a factor’s business development officer eliminate the “What? Me Factor?” response when selling the product? Factors should consider breaking into non-traditional industries and closing well-publicized watershed transactions that give rise to a greater public acceptance of factoring products.
(Ref # FAC023)