ABL facilities allow borrowers to obtain higher leverage at a lower cost compared to cash-flow-based term debt, while also providing certainty of execution and a flexible covenant package. Paul Hastings attorneys Mario Ippolito, Peter Burke, Jennifer Yount & Shafiq Perry examine the key negotiated terms of an ABL facility in the context of a leveraged finance transaction.
Sophisticated market participants are increasingly using option contracts to provide flexibility to traditional borrowing or purchase and sale agreements. However, as Lowenstein Sandler’s S. Jason Teele and Tania Ingman point out, there are a number of interesting complications to this type of transaction when one party is distressed.
The financial crisis resulted in impending loan-related regulatory reform. Meredith Coffey of the Loan Syndications and Trading Association discusses which measures are looming and describes several significant changes that will become realities for secured lenders in the short-term.
Looking for a way to help small and mid-sized businesses overcome the limitations of traditional business loans, entrepreneurs Ken Wilkens, Steve Tarpley and Cal McGinnis of Lenders Commercial Finance designed the Full-Cycle Financing program as a more flexible alternative to a traditional factoring loan.
Business founders and key management are often more positive about a situation than an objective third party. However, this optimism can very quickly cause — or exacerbate — a cash-flow crisis. Gavin/Solmonese director Luke Snyder says a well-crafted 13-week cash-flow model serves as a reality check for all stake holders and highlights a logical path forward.
Many lenders are able to fully satisfy a client’s domestic needs on their own, but this may change when a client enters the international market. A partnership between lenders with differing specialties can provide the greatest value for a client with international needs and ensure a successful long-term relationship for all involved.
At the sixth annual Education and Networking Conference sponsored by the New York Institute of Credit, the Philadelphia chapters of the Turnaround Management Association and Commercial Finance Association and the ABF Journal, four leaders in the commercial lending space offered their perspectives on today’s lending environment and provided observations from their respective areas of specialization.
In a Q&A with ABF Journal publisher Jerry Parrotto, Joe Woolf, executive vice president, media and entertainment finance, OneWest Bank, talks about the key risks with film production loans, which usually involve a detailed cash-flow budget, timeline to produce the film and a collateral pool known as “pre-sales” to support the financing. Lenders will typically mitigate risk via the engagement of a third party that monitors production and cash-flows to ensure the project is completed on time and on budget.
Restructuring expert Robert Katz analyzes the turnaround of Lower Bucks Hospital, which found itself in a cash-flow crisis due to reductions in federal and state reimbursements and increases in healthcare and other costs. Katz notes the special challenges in restructuring a “mission driven” organization that impacts livelihoods as well as lives
Good News/Bad News:
ABLs Say Senior Management “Like the Way They Look”
ABLs Voice Concerns Over Pricing, Structuring & Loyalty