Fortegra Financial Corporation (“Fortegra”), a leading specialty insurer and subsidiary of Tiptree Inc. (“Tiptree”), announced today that it closed on a $200 million Senior Secured Credit Facility from a syndicate of banks led by Fifth Third Bank, N.A. The entire amount is immediately available for letters of credit, with any remaining portion of the facility available for working capital.

Gibraltar prides itself on its ability to provide companies and their private equity sponsors with flexible financing and maximum liquidity, based on our ability to understand each business’ special situation. This enabled us recently to provide Texas-based Easy Gardener Products, Inc, a $20 million credit facility to help with a restructuring.

Easy Gardener designs, manufactures, and sells a broad range of consumer lawn and garden products. It sells its products under several well-known patented and trademark brands such as WeedBlock, Jobe's, Emerald Edge, Landmaster, Ross, and Jobe’s Organics. Its customer base includes longstanding relationships over a 20- to 30-year period with a robust network of large national home improvement and mass merchant retailers as well as local hardware stores and independent garden centers and nurseries.

CIT Group Inc. (NYSE: CIT) today announced that its Power and Energy business served as lead arranger for approximately $185 million in financing for a 66-megawatt portfolio of community solar projects.

The financing was arranged on behalf of Clearway Energy Group, one of the largest developers and operators of clean energy generation facilities in the U.S.

The portfolio consists of 19 separate projects totaling 66 megawatts of solar generation capacity located in Massachusetts, Illinois and New York State.

White Oak Commercial Finance, LLC (“White Oak”), an affiliate of White Oak Global Advisors, LLC is pleased to acknowledge the success of its valued client, StoreBound, a developer and distributor of housewares designed for healthy living. The fast-growing company has been with White Oak since 2015 and recently signed an investment agreement with multinational domestic equipment conglomerate, Groupe SEB, which aims to reinforce its presence in the US housewares market.

Headquartered in New York, StoreBound was recognized on INC’s List of Fastest Growing Businesses for four consecutive years and made Entrepreneur’s 360 List in 2019. 

Rosenthal & Rosenthal, Inc., the leading independent factoring, asset based lending and purchase order financing firm in the United States, today announced the completion of several non-recourse factoring deals with multiple furniture companies in Texas and North Carolina.

After a former Rosenthal client sold its furniture business to a well-known furniture brand in 2019, they reached out to Rosenthal to discuss funding for a new company. The client was seeking financing for several of its furniture businesses, both start-ups and established brands, all of which were experiencing cash flow issues as well as credit coverage concerns. Rosenthal was able to offer a non-recourse factoring solution to cover both. 

By Jeff Wright

With so much uncertainty in the economy during this unprecedented health crisis, planning and communication are critical to any company’s survival. Much is being said about preserving cash. And it’s because we all know cash will continue to be king even when businesses restart operations.

Context Business Lending (“CBL”), a leading family office-backed specialty finance company focused on asset-based lending (“ABL”), announced today new executive talent hires to support its rapid growth during this unprecedented time for the lending market and for small businesses. CBL has developed rapidly the past 24 months into an emerging market leader by investing in technology; data analytics; and human capital. The addition of these four senior executives was needed to support CBL’s exponential portfolio growth over the past two years, nearly quadrupling the size of its portfolio as more middle-market businesses look to asset-based lending as an alternative financing solution.

Experity Ventures, LLC (EV) is pleased to announce that it has closed on a structured credit facility for an initial $65 million and up to $100 million to support the growth plan for ProMed Capital. ProMed is a newly acquired portfolio company of Experity.

By Suzanne Konstance, Boaz Salik, and Archita Bhandari

The effects of the ongoing COVID-19 crisis are being felt in almost every financial sector. While current CARES Act stimulus programs offer strong government support for lending through these programs, these are a short-term opportunity. Overall, institutions that lend money are incurring increasingly higher levels of risk. The most obvious concern surrounds borrower default and lenders are facing the challenge of maximizing recovery on their existing portfolio as default rates are increasing and will continue to increase significantly in the near future. The spike in unemployment recalls how the Great Recession of 2008-09 caused a wave of bankruptcy cases, and it’s nearly certain that we will see an uptick in business and consumer bankruptcy filings. As a result, we see several large lenders continue to increase their credit loss reserves. There are ways to increase recoveries, however, and one is to systematically file UCCs on a portfolio as early as possible.

Restructuring Support Agreement Supported by More Than 75% of Senior Lenders; Files Voluntary Chapter 11 Petitions to Implement Financial Restructuring Plan

Men’s Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore Continuing to Serve Customers;

Company Continuing to Execute Against Previously Announced Plans to Reduce Headcount and Realign Store Footprint

Restructuring Supported by $500 Million in DIP ABL Financing from Existing Lenders; Expected to Convert to $400 Million in Exit ABL Financing to Support Emergence from Chapter 11

David Rains, Founder and CEO of Commercial Finance Consultants, passed away Wednesday following a courageous battle with COVID-19.  David was a longtime executive recruiter specializing in the factoring and asset-based lending industries.  In addition to his work in the industry, David’s work in prison entrepreneurship was a passion and helped many who had no one else championing their cause. David wrote an inspiring article about the program in the June 2019 issue of The Secured Lender.

In lieu of flowers, the family is requesting donations to the Prison Entrepreneurship Program at the following address:

 PO Box 83661
Richardson, TX 75083-6617

“David was highly respected, admired, and loved by all who knew him, and leaves a large legacy in our industry. David was a friend to all and was personally responsible for helping fill many, many positions in our industry. On behalf of the SFNet, we extend our sympathies to David’s wife, Billie, his sister, Debra Wilson - Zukonik, and the entire family.” Stewart Hayes, Managing Director, Wells Fargo Commercial Capital.

Moritt Hock & Hamroff recently reported on the impact of the COVID-19 pandemic on Uniform Commercial Code (“UCC”) Article 9 sales.  Now, a second significant decision on this issue has been published.  While our last alert concerned whether Article 9 sales may proceed in light of Governor Andrew Cuomo’s Executive Order precluding foreclosures (and reported a decision holding such Article 9 sales may proceed), this latest decision addresses the Article 9 “commercial reasonableness” standard in the present environment, holding that the sale terms  established by the lender in question were  not reasonable and staying the sale for at least thirty (30) days.

Citizens Commercial Banking announced today that it is lead left arranger of a $150 million asset-based revolver for Steve Madden (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children.

“We appreciate the opportunity to work with the Citizens team whose strong personal commitment has been felt throughout this process,” said Edward Rosenfeld, Chief Executive Officer of Steve Madden. “Citizens bankers are experienced, trusted advisors and we greatly value the advice and results that the Citizens team delivers.”

(Editor’s Note: SFNet invites feedback on this issue. Please send comments to mocejo@sfnet.com.)

Recently, lenders have confronted proposals for modifications to EBITDA allowing management to add back losses arising from the economic impact of COVID-19.  This has become known as “EBITDAC” with the “C” representing the financial consequences of the coronavirus pandemic.  The Credit Roundtable has said:  “We believe EBITDA calculations include many hypothetical, highly subjective and potentially misleading adjustments.” 

The Credit Roundtable and others have urged the market to resist such proposals so as to protect the position of lenders. 

While the additional addbacks do not seem to have hit the asset-based lending market in the same way that it may have the worlds of leveraged loans and investment grade lending, it is a point for asset-based lenders to watch for, as sponsors draw on practices from other markets for application to asset-based facilities.

Tiffany Dufu will be a Keynote Speaker at SFNet’s virtual Women in Secured Finance conference July 29-30. For more information or to register, please click here. 

Tiffany Dufu is founder and CEO of The Cru. Their algorithm matches circles of women who collaborate to meet their personal and professional goals. She’s also the author of the bestselling book Drop the Ball: Achieving More by Doing Less. According to the foreword contributor Gloria Steinem, Drop the Ball is “important, path-breaking, intimate and brave."

Named to Fast Company’s League of Extraordinary Women, Tiffany has raised nearly $20 million toward the cause of women and girls. She was a launch team member to Lean In and was Chief Leadership Officer to Levo, one of the fastest growing millennial professional networks. Prior to that, Tiffany served as President of The White House Project, as a Major Gifts Officer at Simmons University, and as Associate Director of Development at Seattle Girls’ School.

 

Economic cycles and the related recessions are always challenging for lenders to work through.  The current economic environment brought on by a pandemic is without precedent and it is hard to predict how businesses and the economy will react in both the short and long term.  It is unlikely any lender was prescient enough to have underwritten a pandemic as a risk.  We are all now working in unchartered territory as we await the effects of the pandemic to fully unfold.  Will there be a second outbreak?  Will there be a near-term recovery? How will the recovery look?  V-shaped or flat?  However, the basic principles for managing a problem loan all apply to the current environment.

White Oak Commercial Finance, LLC (“White Oak”), an affiliate of White Oak Global Advisors, LLC, announced that Wes Reagan has joined the Lender Finance Team as Managing Director of Underwriting. He will be responsible for underwriting, sourcing, structuring, and managing lender finance and ABL transactions as part of White Oak’s expanded lender finance and asset-based lending platform. Wes is based in Atlanta and will report to Neal Mulford, the Head of Underwriting and Portfolio Management.

 

The new credit facility consists of an $80 million term loan, with a $30 million undrawn revolver. It replaces OneWater’s former $110 million facility with Goldman Sachs Specialty Lending, which included a $10 million undrawn revolver. In addition, the new credit facility will maintain more flexible covenants and terms. OneWater has elected to use excess cash to make a significant paydown of the principal amount in conjunction with the refinancing. 

Truist Bank acted as the sole administrative agent, collateral agent, swingline lender and issuing bank, while SunTrust Robinson Humphrey, Inc. and Synovus Bank acted as joint lead-arrangers and joint bookrunners. 

This article analyzes the conflict between federal and state marijuana laws, and its impact on the inability of state-legal marijuana businesses to obtain traditional and fundamental types of banking services from federally insured banks. The article is divided into three parts: (i) an explanation of the conflict of state and federal marijuana laws; (ii) the effect of the conflicting laws on the decision of banking institutions to provide services to state-licensed marijuana businesses; and (iii) congressional and judicial attempts to resolve the conflict between state and federal marijuana laws.

 

What challenges have industry executives been up against since the pandemic hit and what kind of future do they envision for the industry? TSL spoke with several SFNet members: Jason Hoefler, managing director/asset-based lending, BMO Harris Bank; Candice Hubert, senior vice president of business development, Republic Business Credit; Mark Polinsky, executive vice president and co-founder of Gateway Trade Funding; Georgia Quenby, partner, Morgan Lewis & Bockius; Stuart Rosenthal of Prestige Capital; and Dan Tortoriello, executive vice president/chief operating officer of North Mill Capital.