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May/June 2011

ABL Marketplace Issue
Vol. 9 No. 4
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Out of the Penalty Box — But How Long Until the Ice Melts? - Once again, ABF Journal checks in with five ABL industry executives to find out their take on the state of things. This year, the consensus is quite clear: In an effort to book loans to their institutions’ balance sheets, asset-based lenders have skated back into play ... and fiercely at that. But just how willing are borrowers to engage to keep structures sound and price rational levels?
In a Market Awash With Liquidity and Thin on the Demand Side… What’s a Lender To Do? - While it’s no revelation that asset-based lenders have provided middle-market borrowers with flexible loan structures that both accommodate growth in times of plenty and allow for more patience during downturns, today’s recovery is calling for a new degree of creativity on every front. With a debt capital market awash with liquidity and competition at an all-time high not to mention a systemic “shift of power,” Crystal Financial’s Colin Cross contends while things might be tough, unique opportunities still exist.
2011 ABL Marketplace Survey: ABLs Take Note as Competition Climbs to a Frenzied Pace - 2011 ABOUT THE SURVEY A respectable 11% of a select group of more than 800 senior asset-based lenders took the time to participate in this year’s Mid-Year Marketplace Survey. As portfolios grew stronger compared to a year ago, competition has also intensified, causing concern among this year’s respondents.
Asset-Based Lending and Leveraged Finance: The New Chapter - Well capitalized banks that over-reserved for bad loans are now seeking the type of yields that ABL deals can generate with perceived less risk. Some banks are going full bore, with new offices and staffing announcements every day. Here Hugh Larratt-Smith and Ted Galovan check in with six executives from various institutions to gain their perspectives on today’s ABL marketplace.
Conversations From Villanova — A Loan Market Review of Q1/11 - In early April, nearly 100 commercial finance, turnaround and bankruptcy professionals gathered at the Villanova University Conference Center in Villanova, PA to attend the Fourth Annual Education and Networking Event jointly sponsored by ABF Journal, the New York Institute of Credit and the Philadelphia Chapter of the Turnaround Management Association. Maria Dikeos, director of analytics for Thomson Reuters LPC, was on hand to moderate a panel focused on the lending environment. We thought it wise to share a portion of Dikeos’ presentation with a wider audience.


A Man for All Cycles …TD Bank’s Walter Owens is Bullish on ABL - In February of this year, TD Bank’s Commercial Banking division received three Greenwich Excellence Awards for its middle-market banking capabilities. At the head of it all sits Walter Owens. Regarded by one colleague as a “true visionary in the business” who fortified TD’s ABL shop while others retrenched, it appeared to be the right time to find out what makes Owens tick.



Basis for Selection: Choosing the Right Turnaround Advisor - Experienced lenders know that sooner or later, some portion of their portfolio will become financially distressed. The causes of distress range from the macro: (e.g. increased unemployment, declining demand, etc.) to the micro (e.g. poorly executed growth initiatives, loss of core customers, etc.). Regardless of the cause, when lenders see that they have a troubled company in their portfolio, they often agree that a turnaround advisor is needed. The key question lenders should ask themselves in these situations is: What turnaround advisor is right for the situation at hand?


The Art of Managing Vendor Negotiations & Communications in a Turnaround - In this environment of economic uncertainty, a company ignoring phone calls from angry suppliers and stretching trade credit is a tell-tale sign of distress. Although this approach may find temporary relief for management, it only delays the inevitable. Eventually every company in this situation will need to face reality head-on with its key stakeholder: the supplier base.


Stick to the Basic Principles: Sage Insights From a Factoring Legend - Having started his career with Standard Factors Corporation in 1949, Louis J. Cappelli, chairman of Sterling National Bank, is enjoying his sixth decade in the commercial finance industry. Based on a wealth of experience garnered from his illustrious career, he shares with ABF Journal his evaluation of the current environment and future opportunities for factoring, as the industry finds its post-recession footing.


TOUSA III: The Secured Lenders Take the Lead! - Once again, TOUSA’s Chapter 11 proceedings caught the attention of bankruptcy professionals as Judge Alan S. Gold of the U.S. Bankruptcy Court for the Southern District of Florida granted a motion that amounts to a score for the first and second lien holders.


FinalCut: Booming Debt Market Largely Unavailable to ‘Turnarounds’ - A report issued by Morgan Joseph TriArtisan noted that although the current syndicated loan and high-yield debt markets are booming, they remain largely unavailable for "turnaround" situations and lower middle-market borrowers seeking to raise funds.

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