May 2004
Brilliant Adaptations…
The Changing ABL Marketplace

Navigating Today’s ABL Market… Syndicators Cast A Wider Net
By Salvatore C. Settineri

Because of banking industry consolidation as well as the trend toward larger deals, the ABL market is now dominated by larger players with the capital, syndication expertise and reputation to bring such deals to market. With these larger, high profile deals, syndication capabilities have become more crucial and require casting a broader net across the market in order to achieve enough depth so as to “clear” the deal. (Ref # CAP009)

Whether Waxing or Waning – Syndicated ABL Deals Maintain Strength & Utility
By Barry Bobrow

In 2003 the ABL market played an increasingly critical role in the overall debt capital markets, and in the process reached new record highs in syndicated dollar volume and deal volume. At the beginning of 2004, the volume levels seen over the past two years appear to have waned, but the strength and utility of the asset-based market remains. (Ref # CAP010)

Here to Stay… The Lure of Second Liens
By Robert C. Rubino

Spawned by the credit crunch of the early 2000s, second liens originally were thought of as transitional or “rescue” capital. However, as corporations and lenders have grown more comfortable with second liens, they’re being used more often and in a broader range of applications. (Ref # IND048)

Cash Tsunami: A Tidal Wave Hits ABL Markets
By Andrea L. Petro

Although economists generally agree that the economy is only gradually recovering from the recession that began in 2001, the same does not hold true for the availability of credit. A dramatic and unusually rapid shift has occurred within the last three quarters – a shift from constrained credit availability for ABL borrowers, to a market evidencing all the classic signs of over supply. (Ref # CRD015)

2003: A Banner Year for ABLs
By Daleep Akoi

2003 was huge for asset-based lending (ABL). “Nothing short of a banner year,” says one lender triumphantly. Issuance ballooned because “fallen angels” scrambled to put together credits that were palatable to ABL players (no one can ignore the blue-chip factor), and because bankruptcies relegated issuers to the DIP column. (Ref # IND049)

A PROFILE OF SUCCESS
A Profile of Success: Going Above & Beyond to Serve Clients
A Profile of Richard S. Downey, Managing Director of Wachovia Capital Finance

Rick Downey’s team at Wachovia looks for more than great deals; they look for great customers who will be with them for years to come. It’s not the traditional way of doing asset-based lending business, but it has made Wachovia one of the largest and most respected lenders in the industry. You might call their extraordinary attention to building customer relationships “uncommon.” (Ref # EXEC016)

LEGAL EYES
Preference Actions, Fools & Their Money -Par t II
By Patrick M. Jones and John T. Gregg

“Fool me once, shame on you; fool me twice, shame on me.” This old saying, which can be traced back to 1786, probably was not intended to describe the frustration felt by creditors that become targets of “preference actions,” but it most assuredly does. (Ref # LGL031)

PUTTING IT TOGETHER: ANATOMY OF ABL TRANSACTIONS
Capital & Blue Jeans: Searching For The Right Fit
By Mark Sarti

In September 2003 Levi Strauss and Co. completed a $1.15 billion refinancing, comprising a $650 million asset-based revolving loan and a $500 million term loan both arranged by Bank of America and Banc of America Securities. The transaction was significant in that it permitted the company to more fully utilize its tangible and intangible assets in a new credit structure which provided more liquidity and flexibility for the company to execute its business plan. (Ref # DLS012)

TURNAROUND CORNER
Getting Things Done… Shifting the Balance of Power – Part II
By Tony Natale

Frequently in turnaround situations, lenders are concerned whether or not the consultant will have the ability to effectively impact the borrower’s actions. Therefore in the referral-building phase, the consultant should seek to answer the lender’s question, “Can the consulting team get the job done?” Part I of this article appeared in ABF Journal’s April issue and addressed the sources of a consultant’s power in influencing the borrower’s actions. Part II covers how power shifts during the course of a consulting engagement. (Ref # TM025)