SR Alternative Credit, formerly Old Hill Partners, provided a one-year, $10 million senior secured term loan to a company that acquires and leases standard 20- and 40-foot shipping containers, among other transportation equipment.
This was SR Alternative Credit’s third transaction with this borrower, whose lessees include shippers with trade routes primarily in Southeast Asia and other regional routes. Security for the loan consists of new containers, leases, receivables from leases, assignment of management agreements, a lockbox for manager payments, a stock pledge of the borrower and guarantees.
“The owner-lessor in our deal has acquired containers and leased them under long-term leases. Their lessees operating within the Southeast Asia markets face less volatility than in the global market. We believe that container price and lease rate declines will be leveling out in the coming year, but we have advanced cautiously as this market recovers. With that in mind, this is an opportune time to finance seasoned container owners with creditworthy lessees,” Sam Adams, portfolio manager at SR Alternative Credit, said. “We worked closely with the borrower and its parent company, which has extensive experience in container acquisition and leasing, to craft a transaction that capitalized on the opportunity while building-in collateral and cash flow safeguards, such as LTV triggers and lease payment reserves, to mitigate risk. We continue to explore opportunities in this sector and in transport finance generally.”
SR Alternative Credit joined the Spouting Rock Asset Management platform in January and provides asset-based lending solutions for borrowers seeking $10 million to $50 million in financing.
