The rate of default and workouts for loans with IP assets as collateral has reached a crescendo. We examine the near-term implications for workouts and liquidations where IP assets are expected to provide a meaningful source of lender recovery, and the longer- term implications for commercial lending to retail and consumer brand companies.

The PNC Financial Services Group, Inc. (NYSE: PNC) and the Spanish financial group, Banco Bilbao Vizcaya Argentaria, S.A. (NYSE and MAD: BBVA) today announced that they have signed a definitive agreement for PNC to acquire BBVA USA Bancshares, Inc., including its U.S. banking subsidiary, BBVA USA, for a purchase price of $11.6 billion to be funded with cash on hand in a fixed price structure.

BBVA USA Bancshares, with $104 billion in assets and headquartered in Houston, Texas, provides commercial and retail banking services through its banking subsidiary BBVA USA and operates 637 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico. When combined with PNC's existing footprint, the company will have a coast-to-coast franchise with a presence in 29 of the 30 largest markets in the U.S.

Growing firm expands capabilities with a division focused on large deals

Gerber+ provides funding for its first client, Molded Acoustical Products

Gerber Finance, a leading finance partner for companies experiencing accelerated growth, is expanding its portfolio and client offerings with the launch of Gerber+. This new division will service businesses seeking a higher level of funding ranging from $10 to $25 million. Gerber Finance currently focuses on facilities up to $10 million. Gerber is also announcing its first Gerber+ client, Molded Acoustical Products (MAP) of Easton, a full-service insulation manufacturing solutions company.

Encina Business Credit, LLC announced today that it is the Revolving Agent on a $115 million senior secured credit facility used to support the acquisition of a mid-sized discount retailer of home décor.

The revolving line of credit, which is collateralized by accounts receivable and inventory was used to support the purchase price and ongoing working capital needs of the borrower.

Gerber Finance found the ideal candidate in Andrew Hollingsworth to develop its Natural Products Group and set up a west coast operation to serve its clients' growing portfolio. Andrew possesses a keen understanding of the mindset and needs of natural product companies, having served as CFO for Numi Organic Tea, and brings a deep background in banking, accounting, and finance. Andrew manages Gerber Finance's growing portfolio of natural products clients who value the consultative, relationship that is the hallmark of the Gerber formula. Natural Products Group clients include baby food and products, mushroom mycelium powders, protein powders, sustainable and reusable food storage bags, organic tea, and Asian bone broths and noodles.

As the former CFO of Numi Organic Tea, Andrew was first a client of Gerber Finance, supporting the growth of the business and the brand's expansion. In his role, Andrew garnered an in-depth knowledge of supply chains, business seasonality, and cycles, supporting the need for investment in innovation and the expansion into new markets, leading strategic planning and analysis, debt financing, and investment rounds.

Northpoint will offer senior secured revolving credit lines and term loans ranging in size from $2 million to $20 million to borrowers across a wide range of industries. Industry veteran Robert Wagner, Northpoint General Manager and Head of Asset-Based Lending, will lead a team of seasoned ABL professionals.

Hovde Group executives, Tim Stute and T.J. Humes, pictured above, provide an overview of the effects of the pandemic on M&A market conditions.

- Led by CEO, Gene Martin, and the current investment team, Callodine Commercial Finance will be the successor firm to Gordon Brothers Finance Company, LLC

- Investment strategy is consistent with Callodine’s focus on yield-oriented investment opportunities across the capital markets

Gerber has established this new division alongside its parent company, eCapital Corp., ("eCapital"), a leading alternative finance provider, to help companies grow and achieve their mission by accelerating their access to capital. The new division will be led by Senior Vice President Entela Semini, who will serve as Northeast director of Gerber+.

FOCUS

If you seek tranquility, do less. Or (more accurately) do what’s essential. Do less, better. Because most of what we do or say is not essential

  -- Marcus Aurelius

Lenders (and most others) struggle with a particular problem almost every day: how to prioritize deals they can get done versus those they can’t. Prioritization affects all of us, but how practically can we focus on what is essential? We are living beings and our most important asset is time, so let’s use it wisely. But how do we know if we are using it sensibly?  Seneca similarly stated,

It is not that we have a short time to live, but that we waste a lot of it

Granted, he was referencing our lives and not lending, but the lesson still applies. What is essential in lending?  To be successful in lending one only to needs consider duration – safety – return and contingencies (perhaps a subset of safety).

Jeffrey Goldrich, SFNet’s 2021 president, has been in the asset-based lending and factoring business for over 40 years. He founded North Mill Capital, as its president and CEO, with its management group in 2010. In 1995 he co-founded, as a shareholder and COO, Business Alliance Capital Corp (BACC), a national commercial finance company based in Princeton, New Jersey. Goldrich and his partner sold BACC to Sovereign Bank (now Santander) in 2005.

Prior to that, he was a senior vice president and manager of the asset-based lending department of First Fidelity Bank in Newark, New Jersey.

Moritt Hock & Hamroff (MH&H) announced that two new attorneys joined the firm’s Creditors’ Rights, Restructuring & Bankruptcy practice group: Allison Arotsky and Michael C. Troiano. Each focusing in restructuring matters, Arotsky and Troiano will be adding to MH&H’s more than 40-year-long leadership role in the creditors’ rights sector.

Marc L. Hamroff, managing partner of MH&H, said, “We are delighted to build on our longstanding reputation and excellence in servicing the creditors’ rights, restructuring, and bankruptcy industry by adding two outstanding attorneys to our practice. Both Allison and Michael are expected to make an immediate positive impact on our services to our clients in these areas through their proven expertise, skills, and knowledge of bankruptcy law.”

I was a lender for over 40 years and have been a member of SFNet for most of that time.   I have attended many conferences over the years.  I especially enjoy the SFNet Annual Convention.   A different city every year, an opportunity to catch up with all the people I know in the industry, but haven’t seen in a while, and an opportunity to meet lots of new people that I didn’t know or only knew by telephone or e-mail.   When I was a lender, our syndications group would arrange a lot of meetings with existing and potential new partners and very often was able to pitch new deals.   This was a time to solidify relationships, expand your professional and personal network and maybe get some business done.  For years, I never came home from the convention without at least one new potential deal to review.   And, of course, there were always exceptional keynote speakers and terrific panels to attend as well. 

CIT Group Inc. (NYSE: CIT) today announced that its Power and Energy business served as coordinating lead arranger on a $151 million financing for the 250-megawatt Galloway I solar farm planned for Concho County, Texas.

The financing was arranged on behalf of Skyline Renewables and 8minute Solar Energy (8minute), which will continue to jointly oversee development and construction of the project. Galloway I was acquired by Skyline Renewables, an experienced renewables company backed by the infrastructure team at Ardian, a world-leading private investment house.

Since its founding in 2012, Siena Lending Group has worked extensively with financial sponsors.

Achieving milestones like these speaks to Siena’s longevity, creativity in structuring deals and reliability in closing them. It tells people how much private equity firms and other financial sponsors trust Siena for asset-based lending solutions.

In August, Bank of America announced that Seth Benefield had been named head of Bank of America Business Capital (BABC) and Asset-Based Financing.

He is responsible for managing an international team of asset-based lenders that deliver secured credit facilities and other complementary banking products and services to mid-size and large corporate companies. With nine primary offices serving the United States, Canada and Europe, BABC provides corporate borrowers with senior secured loans of $5 million or more, cash management, interest rate and foreign exchange risk management, and a broad array of capital markets products.

Based in Atlanta, Benefield has been with the bank for 20 years, previously serving as National Marketing Manager, where he managed a team of business development officers who provide asset-based solutions and banking products to large and middle market companies, intermediates and financial sponsors across the U.S. and Europe. Prior to joining the bank, he served as a special agent in the Federal Bureau of Investigation.

Benefield earned a Bachelor of Arts degree in Accounting from University of Georgia. He is a Certified Public Accountant and holds Series 7, 24, 63 and 79 FINRA registrations.

John DePledge, head of Asset Based Lending at Bank Leumi USA, discusses his tenure as SFNet president and COVID’s impact on plans.