October 2005
Creativity & Innovation —
Hallmarks That Distinguish an Industry

When the Going Gets Tough… Asset-Based Lenders Get Creative
By Megha Bahree, Reporter, Loan Pricing Corporation

A dearth of true asset-based loans is spawning a variety of quirky substitutes – airball tranches, creative collateral and ventures in atypical sectors. The peculiarities of these deals, however, have not put off ABL lenders who – because of fewer DIPs and fallen angels, and cheap cash flow markets – are not seeing too many new deals. (Ref # IND068)

Staying On Top of Things… 
Solid Appraisals Begin With Solid Industry Knowledge

By Lester M. Friedman, CEO, Appraisal & Valuation Services, LLC, Great American Group

Professional appraisal and valuation firms must not only adapt themselves to changes in the asset-based lending industry, but also have their finger on the pulse of what is happening month-by-month and even sometimes day-by-day in a wide range of other industries. The following “Industry Outlooks” provide an overall assessment of seven key industries’ health, including projections for the future, risks and recovery factors.
(Ref # APP029)

Passing the Baton:
Leveraged Recapitalizations Serve as Powerful Tools in Succession Plans
By Ira Kreft, EVP & Group Manager, Bank of America Business Capital

A leveraged recapitalization can be a powerful financing tool that can assist companies and their owners in meeting their business objectives. Following a leveraged recapitalization, company management tends to become more focused on the efficiency and effectiveness of its operations, resulting in improved operating performance and working capital management.
(Ref # IND069)

We’re No. 1*

*For All Deals Done on Tuesdays During Snowstorms
By Barry Bobrow, Managing Director, Wachovia Securities

In the following article, Barry Bobrow of Wachovia Securities warns of the pitfalls of lenders focusing only on the league table rankings while ignoring their original purposes – to objectively rank market activity and to provide objective market research as to the size and dynamics of the asset-based markets. (Ref # CAP012)

The Next Wave: Lenders Look Beyond the Horizon
By Howard Brod Brownstein, Principal and Roseanne Sweeney, Senior Consultant, NachmanHaysBrownstein, Inc.

Throughout the asset-based lending community, senior lenders are asking the same questions: Will there be another wave of loan credit issues and equity fund portfolio problems? If so, when will it occur and how severe will it be? In the following roundtable discussion, Howard Brod Brownstein and Roseanne Sweeney posed these questions to a broad spectrum of senior executives at leading institutions.
(Ref # IND070)

GE’s at the Customer, For the Customer Initiative…
Delivering Financial and Intellectual Capital
By Michael Antonietti, Managing Director, GE Global Sponsor Finance

First launched at GE in 1999, the “At the Customer, For the Customer” program leverages the entire GE toolkit of business improvement tools and methodologies to strategic customers to drive cost savings, productivity and revenue growth. Recently, First Reserve tapped the ACFC team to assist in an initiative at its portfolio company, T-3 Energy Services. (Ref # COMP012)

Lower Middle-Market Distressed Situations:
An Affordable Advisor Can Make the Difference
By Tom Jones, Founder, Concord Financial Advisors, LLC

In 2004, more than 34,000 U.S. businesses filed for bankruptcy. While there are many unavoidable factors that force businesses to file, there are many avoidable factors that, with proper planning and preparation, can be dealt with effectively to save the business from demise. (Ref # TM046)

Aye, There’s the Rub… Some Little Things That Nag Your Attorney
By Frederick W. Runge, Jr., Chair, Miles & Stockbridge, Transactional Finance Practice Group

A lot is written about major trends and issues – alternative debt products in cross-border financing and the effects of Sarbanes Oxley on publicly traded borrowers and lenders alike. There are a host of smaller issues that deal more with the blocking and tackling levels of the industry that nag your attorney. Here are several for your consideration. (Ref # LGL049)

The Law Giveth & the Law Taketh Away – Real Estate Issues for Asset-Based Lenders
By Jim Matthews, President, Prime Locations

After October 17, 2005, and the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act, the landscape for asset-based lenders and the management of troubled companies will have changed. The tables have turned in favor of landlords playing a vital role in deciding whether a business in trouble has a fair chance to achieve solvency. It seems that Congress has allowed the landlords access to the lenders’ piece of the pie. (Ref # CRD020)

A PROFILE OF SUCCESS
Steel City Capital Funding: A New Arrow in the PNC Quiver A Look at PNC Business Credit’s New Second Lien Shop

While the name “Steel City Capital Funding” may be new in the second lien loan market scene, its parent, The PNC Financial Services Group, is immediately recognizable. In July 2005, PNC Business Credit launched Steel City as a specialty finance company to provide stand-alone second lien loans and turnaround financing for middle-market companies across the U.S.
(Ref # COMP013)

A PROFILE OF SUCCESS
A Lender With a Passion for the People

An Interview With Steve Fischer, CEO of North Fork Business Capital
By Kara A. McDonald, Staff Writer

In this day and age, you’d be hard-pressed to find someone who would willingly forgo retirement so that he or she could take the helm of a start-up company. But that’s exactly what Steve Fischer, CEO of North Fork Business Capital, chose to do in 2004. What was the impetus behind this decision? Not fame or fortune, but simply the people.
(Ref # EXEC025)

A PROFILE OF SUCCESS
Agile, Quick & Tenacious… Distinguishing Attributes for an Energetic Specialty Lender
An Interview With Ted Koenig, President & CEO of Monroe Capital

Agile, quick and tenacious are terms often used to describe professional athletes, but these words are rarely associated with a lender – except a lender like Monroe Capital. Ted Koenig and his team at Monroe Capital have built a successful specialty lending business that has managed to distinguish itself in what seems to be an industry comprised of an ever-increasing number of indistinguishable investment funds.
(Ref # COMP014)

TURNAROUND CORNER
Growing Top-Line Sales & Pricing Opportunities –

Seven Tricks of the Trade
By Daniel F. Dooley, Principal, Morris-Anderson & Associates

Many in the financial advisory world believe that they are experts at cost reduction, productivity improvement, working capital reduction and idle asset sales. Fewer believe they are good at growing top-line sales, and still a very few focus much time and attention in the area of clients’ pricing-leverage opportunities. Below are seven of the “tricks of the trade” on pricing opportunities. (Ref # TM047)

FACTORING FOCUS
The New International Factoring Association –
How a Computer Programmer Became Factoring’s Leading Advocate
By Christopher Moraff, Staff Writer

In July, the IFA announced that it was breaking from its longtime corporate parent organization – software company Distinctive Solutions – to become a fully independent industry association. Responding to the news, the IFA’s constituency expressed its collective delight, saying the move would make the organization more attentive to the needs of its members.

(Ref # FAC048)

LEGAL EYES

Failure to Advise – Is There a Corollary Between
Residential Real Estate & Commercial Deals?
By James D. Prendergast, General Counsel, The First American Corporation UCC Division

The purpose of the following article is to raise the issue of the attorney’s responsibility to his or her client to, at a minimum, discuss the utility and risk management aspects of UCC security interest priority insurance. The article continues by drawing a corollary to recent developments in the residential real estate law. (Ref # LGL050, INS010)