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12sept

September 2012

ABL Borrowers' Issue
Vol. 10 No. 6
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FEATURES

Asset-Based Lending Heats Up in the Midwest - Traditionally, the Midwest, with its concentration of privately held manufacturing and distribution companies, has been fertile ground for middle-market asset-based lenders. Today, the ABL market in the region is heating up due to hungry new competitors and existing lenders expanding their reach. For companies looking to increase their borrowing needs, the market is wide open. And for lenders, the challenge is to grow while maintaining appropriately priced and structured asset-based loans.
GE CCO Discusses NCMM Survey Loan Issuance Off, Yet Still a Lot of Supply - GE Capital recently partnered with the Ohio State University Fisher College of Business to establish the National Center for the Middle Market, which produces a Middle Market Indicator Survey. ABF Journal spoke with GE Capital’s Robert McCarrick as he relayed the findings of the survey and explained that although there is increasing pessimism about the economy and loan issuance is off, there is still financing out there — a benefit to both lenders and borrowers.
Class Is In Session… CIT Goes Back to School, Launches Factoring University - Although factoring has been around for centuries, Jonathan Lucas, president of CIT Trade Finance, and his colleagues found themselves discouraged by the lack of accurate information about this longtime financial service. Determined to raise awareness and educate business owners on factoring, CIT launched Factoring University as a comprehensive, yet accessible, online resource.
Phoenix Management Q2 Survey: Lenders Identify Political Uncertainty as Chief Concern Regarding Future Economic Growth - Each quarter Phoenix Management distributes its proprietary “Lending Climate in America” survey to over 2,000 lenders nationwide. In the prior two quarters (Q1/12 and Q4/11), Phoenix saw significant improvement in nearly all of the lending survey metrics, including improving economic trends, relaxed credit facility structures and accelerating customer growth plans. While overall lender sentiment remains near recent survey highs, results from the most recent survey (Q2/12) reveal a tempering of lender enthusiasm.
Uncertainty Rules the Markets –— We’ve Seen This Movie Before And It Feels Like It Keeps Running In A Continual Loop. - There are many factors contributing to an economic malaise that we can't seem to shake. Nonetheless, there are, quietly, significant improvements in our domestic economic fundamentals that suggest that U.S. companies are positioned to take advantage of the economic recovery.
The Great EBITDA Myth - Although some would describe EBITDA as a way to measure a company’s operating performance, free of debt cost, taxes, depreciation and amortization, veteran turnaround advisor Ted Gavin prefers to call EBITDA a fairytale told to investors and credit managers. In this no-holds-barred article, Gavin explains why …
Getting to “Yes” When Banks Say “No” — Bifurcated Collateral Loans Provide Incremental Liquidity - As banks and other traditional capital providers continue to limit or deny financing to companies with imperfect credit, many middle-market and asset-intensive businesses struggle to find a cost-effective capital structure. However, there is a viable financing alternative for businesses facing a credit crunch — bifurcated collateral loans.
Recent Trends in Asset-Based Lending — Understanding the History of ABL Can Reap Benefits - From the "plain vanilla" days of the 1990s, through the "Dot.bomb" era in late 2000, to today's post-crash period, Bank of America analysts highlight ABL trends over the years and show how companies can utilize the knowledge gained from this sector's history. The latest evolution is underway: How can it benefit your company?

COMPANY/EXECUTIVE PROFILE

Growing International Presence… Coverage in Many Countries Benefits Wells Fargo Trade Capital Finance - The ABF Journal last met with Stuart Brister in 2010 to discuss the ABL "powerhouse" called Wells Fargo Capital Finance that resulted from the Wells Fargo-Wachovia merger. Today, we ask Brister, president of the Trade Capital Finance Division, and John Marrinson, regional credit manager of the Purchase Order Finance Group, to discuss how the acquisition and the global and domestic economies have affected the company's international finance endeavors.

FROM ALL FACETS

TURNAROUND CORNER

Distressed Company Rescue: Identify Problems Early…React Rapidly - The market decline, economic slowdown and contraction in liquidity over the past five years have led to an increase in the number of businesses regarded as underperforming or distressed. Most business failures can be traced back to problems arising years prior to any corrective action. However, immediately responding to early indicators of distress can provide management and lenders a variety of rescue strategies.

SPECIALTY LENDING SHOP

‘A Tale of Two Economies:’ Alternative Financing to the Rescue - When Charles Dickens wrote, “It was the best of times, it was the worst of times,” he might as well have been writing about the current economic climate. An era of uncertainty began after the 2008 crisis, and while certain industries have blossomed, many industries continue struggle through these economic changes. Increased bank regulation and the tightening of credit have severely impacted the traditional financing avenues and the borrower’s ability to secure traditional financing.

LEGAL EYES

Court Determines That Ending Forbearance Does Not Equate to Economic Duress - If a lender ends a forbearance agreement, does that equate to bringing economic distress to the borrower? Reed Smith’s Brian Schenker summarizes the case and court findings in Interpharm Inc. vs. Wells Fargo Bank, N.A., 655 F.3d 136 (2d Cir. 2011) to show how the lender did not exceed the borrower’s rights under their established agreements and what it means for similar borrowers in the same situation.

FINALCUT 

FinalCut: Geithner, Others Questioned Integrity of LIBOR in 2008 - ABF Journal illustrator Jerry Gonzalez shows how British regulators, bankers and politicians ignored the warning by Timothy Geithner, then president of the New York Fed, Citigroup and others in 2008 that the LIBOR was being manipulated.

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