Lauren Smith, senior manager, and John Lankenau head of valuation and accounting product solutions, both at Primatics Financial, discuss the FASB’s proposed CECL standard, why it’s causing concern for financial institutions, and how using technology can assist with impending changes.
From the days of The House of Morgan’s global dominance in the early 1900s to current times, transatlantic transactions featuring new products such as ABLs are becoming more mainstream. European asset-based financing is gathering momentum as CFOs discover the multitude of benefits.
Mark Hafner, president & CEO, Celtic Capital Corporation, provides a personal look into the history of the company founded by his father, the reasons he sold the company to larger banks in 2008 and 2012, and why he followed his dream of returning to Celtic’s roots as a privately held company — a decision lauded by industry insiders.
ABL volume is up from last year, with Q1/14-Q3/14 new-money deals substantially higher, six percentage points, than the same time last year. Refinancings continue to dominate, and demand still outpaces supply — pushing pricing downward. But there has been a return to more traditional ABL refinancings, with fewer opportunistic refinancings in Q3/14.
Wells Fargo Capital Finance’s Barry Bobrow writes to the CFO to explain the benefits of stepping outside the traditional loan structure and into an asset-based facility. Using some case studies as an example, Bobrow is able to highlight why choosing an ABL structure better fits the needs of certain borrowers in an ever evolving market.
As U.S. companies continue expanding their offerings globally, asset-based lenders that successfully work with exporters, their customers and export credit insurers will open the door to tremendous growth opportunities.
The Phoenix Management Q2/13 “Lending Climate in America” survey revealed waning lender optimism; however, sentiment has taken a more positive turn over the last 12 months. The Q2/14 survey indicates that despite a few signs of caution, lenders are increasingly optimistic about the U.S. economy and commercial lending on a near-term and long-term basis.
As more small and middle market domestic companies venture into foreign countries to capitalize on overseas opportunities, lenders must educate themselves on jurisdictional laws to successfully engage in cross-border, asset-based loans.
Over the past two decades, banking has changed radically. From the rise of interstate banking to new regulation and financial reform, asset-based lending has maintained static — until now. Triune managing director Timothy Alexander asks, “Can you teach an old ABL dog new tricks?”
Inez Markovich gives readers an overview on the OCC’s recently issued handbook on asset-based lending. She notes that financial institutions pursuing ABL transactions need to keep abreast of the current examination principles and, if necessary, strengthen internal procedures designed to improve the risk management of their ABL portfolios.