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November/December 2011

Annual Conference Issue
Vol. 9 No. 8
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Refinancings Drive ABL Pipeline Toward Record 2011 Issuance; 2012 Deal Flow Unclear - So far this year, asset-based lending (ABL) has been one for the record books — although the accompanying enthusiasm has been fairly muted. Looking forward to Q4/11 and into 2012, prospects for deal flow are in a bit of a fogbank in terms of where new deals will come from. And while it’s been a good year for ABL in terms of issuance, the rest of the year is unclear.
Crystal Financial Revisited — Five Years Later & Three Times Charmed - Ward Mooney, Colin Cross and Michael Pizette are no strangers to success. Despite their collective achievements, these veteran lenders point out that the ultimate beneficiaries of all their hard work are the dozens of companies struggling to make their way in an unfriendly credit environment -- companies that without their help, could very likely become casualties of an economy still struggling to recover.
State of the Factoring Market — Yin & Yang in 2012 - Working Capital Solutions’ Tom Siska provides both the yin and the yang for the factoring industry in 2012. The good news: Things will not be as bad as the Great Recession of 2008 and 2009. The bad news: Things will most likely get worse in 2012 before they get better, and no one knows when that will be.
A Brand-New Ball Game? What Stern v. Marshall Means for Lenders - What’s all this about Stern v. Marshall? Commentators and courts have scrambled to take the Supreme Court at its word, and attempt to limit the impact of the Stern decision. Whether these decisions will stand up under future Supreme Court review, if and when it occurs, is not so clear. Early decisions seem favorable, but it is likely that litigants emboldened by Stern—including those adverse to secured creditors—may probe the limits of bankruptcy court authority.
Federal Loan Survey — Increased Competition Spurs Continued Easing for C&I Loans - In July 2011, the Federal Reserve Board conducted a Senior Loan Officer Opinion Survey on bank lending practices over the past three months. Lenders from 55 U.S. banks continued to ease lending standards and most terms on all major types of loans other than loans secured by real estate.
A Look Back at 2011 – So Far, What’s So - The year 2011 began on a hopeful note with signals that the U.S. economy was showing signs of strength in 2010. This, after a dismal and disappointing 2009. In the following article, Great America’s Michael Petruski returns to review the first three quarters of 2011 with a look at industries and markets where asset-based loans are directly affect by change and cyclicality.


Armed With a Unique Platform and Intense Passion for ABL, AloStar Business Credit is Ready to Serve Its Market - How do two ABL industry executives turnaround an ailing correspondent banking business into an ABL powerhouse? For Andrew McGhee and Michael Gillfillan, executives at AloStar Bank of Commerce and AloStar Business Credit, the answer comes quite easily. Remember who you are and do what you do well. Armed with a unique platform , a top notch staff and an intense love of the ABL business, McGhee assures this relative newcomer is open for business.
Asset-Based Lending Team Joins Rockland Trust to Expand Middle-Market Lending — Chris O’Connor, SVP, Leads New Initiative - In August, Rockland Trust expanded its commercial lending capabilities by hiring an experienced team of asset-based lending professionals who recently worked together at Webster Business Credit. Led by Chris O’Connor, senior vice president of asset-based lending at Rockland, the unit is poised to build on the 104-year-old bank's strong regional reputation and robust growth in commercial lending over the past five years.



Turnaround Accomplished: Correcting Cost Accounting in Service Organizations - Often times the complexity of the transactions in service organizations conceals the understanding of the true cost drivers. As these organizations grow, customer offerings usually expand and the ability to maintain cost controls fall by the wayside. A step-by-step approach to understanding the sales fulfillment process and related transaction costs should be undertaken to direct turnaround efforts to the most critical areas.


The New Consumer Financial Protection Agency Could Spell Trouble for the Factoring Industry - As part of Dodd-Frank, a new federal agency was created: the Consumer Financial Protection Bureau (CFPB). The board of the American Factoring Association, notes that the CFPB, which is authorized to promulgate regulations relating to consumer protection, could deem crucial aspects of factoring transactions as being “abusive” and impermissible.


Contractual Subrogation in Bankruptcy and the Right to Vote - The U.S. District Court for the District of Arizona recently issued an opinion in the bankruptcy case of Avondale Gateway Center Entitlement (the debtor) affirming a bankruptcy court decision holding that the contractual subrogation, through a subordination agreement, of a senior secured lender to the rights of a junior secured lender authorized the senior lender to vote on the debtor's Chapter 11 plan of reorganization on behalf of the junior lender.


Subordination Agreements… Losing the Upper Hand - Here’s something to think about: Does the UCC create a limit on the damages a senior credit presumes it can recover from a junior creditor if the junior creditor breaches? This article addresses a particular circumstance when a senior creditor’s contractual expectation may not be protected vis-à-vis a subordinate junior creditor as a result of the senior creditor’s misplaced reliance on a less than well-crafted subordination agreement.


FinalCut: Wall Street Aristocracy Got $1.2 Trillion in Fed’s Secret Loans - ABF Journal illustrator, Jerry Gonzalez offers a "revolutionary" interpretation of a top-ranked news story.



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