TSL Feature Articles

The U.S. economy wrapped up 2023 on a robust note, buoyed by resilient consumer spending and a solid labor market. 

The first quarter of 2024 presented a complex landscape for asset-based lending (ABL) and the broader economic context. According to the SFNet Q1 2024 Asset-Based Lending and Confidence Index surveys, the ABL industry exhibited both stability and cautious optimism despite the economic headwinds.

As we delve into the second quarter of 2024, the financial landscape is marked by both challenges and opportunities. The latest SFNet Market Pulse Report provides a comprehensive analysis of various economic indicators, trends, and projections that are crucial for stakeholders in the secured finance (notably asset-based lending and factoring) industries. This article synthesizes the key findings and insights from the report, offering a detailed overview of the current economic outlook, credit markets, consumer finances, sector activity, and global economic trends.

The secured finance industry is feeling the strain as the industry ages and its most experienced executives retire. Here, SFNet members offer their points of view on the challenge.

Past SFNet 40 Under 40 Award recipients discuss how the Award affected their careers and offer advice to the next generation.

Earlier this year, Jeffrey B. Dunlop and Maria T. McGuire were named co-chairs of Goldberg Kohn’s Commercial Finance Practice Group. They succeed Michael Hainen, who completed his highly successful nine-year term as the practice group leader at the end of 2023.

As the automotive industry moves toward electrification, lenders face an uncertain path forward. The successful transition to EVs will require substantial investment at all levels, from charging technology and coverage to dealership infrastructure. As the effect on total cost of ownership unfolds, the residual value models that underpin the entire industry will need to be redefined, impacting financing and leasing. Lenders to the mobility sector should be prepared for further disruption which will provide either opportunities or create credit challenges as companies navigate this dynamic landscape.

Finding the right combination of capital resources and strategic knowledge in the sale and restructuring of a business is complicated; but when it works, this seemingly magical process of transformation creates incremental value for all constituents involved in the bankruptcy process. Take the case of Armstrong Flooring, and three affiliated companies, that each filed petitions in the United States Bankruptcy Court for the District of Delaware seeking relief under Chapter 11 on May 8, 2022.

Since the DEI “field” is a potpourri of research, advocacy, political ideations,
and personal perspectives from multiple fields, it is difficult for people to know which sources of information to trust. One of the latest urgent fascinations that has captured our collective attention is “DEI Fatigue.”

Industry ally and affinity group members and leaders share their stories and discuss how their organization’s groups began and their benefits.

How will reduced consumer spending and increased leverage cost stress manufacturing & industrial companies in the year ahead?

In an increasingly paperless world, electronic bills of lading are garnering attention as an industry choice for cross-border commercial and shipping transactions. This article provides an overview of the legal framework prescribed by Articles 7 and 9 of the Uniform Commercial Code for a secured lender seeking to perfect its security interest in electronic bills of lading.

The credit risk panel at SFNet’s 79th Annual Convention focused on challenges such as consumer headwinds, the higher cost of capital, looming refinancing deadlines, and the prospect of more downgrades, bankruptcies and defaults. Overall, though, panelists were optimistic about credit appetite and the ability to negotiate risk through tighter deal structures and more in-depth borrower and sector analytics.

TSL’s editor-in-chief sat down with key members of Holland & Knight’s ABL team, including Wade M. Kennedy, partner and co-lead of the Asset-Based Lending Team; Christopher S. Dillon, partner and co-lead of the Asset-Based Lending Team; Hamid Namazie, financial
services partner; Yoojin Lee, financial services partner; and Mark Spitzer, financial services partner. Here, they discuss H&K’s strengthening of its finance practice, how they got their start in this specialty and the threats facing lenders in 2024.

Despite economic headwinds and higher costs of borrowing, secured lenders are expecting a profitable year ahead

“Liability Management Transactions” continue to grab headlines. Companies in distress are turning to the out-of-court restructuring of their debt in ways that leave lenders who made loans on the basis of a senior secured position either with certain assets no longer available as collateral pursuant to a “drop down financing” or subordinate to new tranches of debt pursuant to an “uptiering transaction.” This article takes a look at the arguments being made in some of the litigation that has often followed on such uptiering transactions and in particular the June 2023 decision of the Bankruptcy Court in the Serta case.

Commodity producers face volatile market swings due to factors such as macroeconomics and supply chain stability, creating risks for secured lenders. Understanding each commodity’s nuances, risk-management strategies, and regulatory considerations is crucial. To navigate these challenges, secured lenders must maintain strong industry knowledge, adapt lending structures, collaborate with third parties, and balance risk and return for their clients.

Barry Bobrow is a managing director and head of credit markets for Regions Business Capital. He is a widely respected leader in middle-market leveraged finance and asset-based lending. He has spent the past 38 years working in banking, most of it as a debt capital markets professional, primarily in leveraged lending and supply chain finance. Bobrow is the creator and chairman of the Asset Based Capital Conference (ABCC), an SFNet sponsored conference focusing on the middle-market leveraged and asset-based markets, now in its 16th year. Here, Bobrow discusses his career trajectory, his outlook for the industry and his goals for SFNet in 2024. 

What are the credit needs and opportunities for today’s small-business owners? This article explores results from Pathward’s new survey. 

The capacity for a lender to take effective security over a changing pool of assets is of critical importance to the asset-based lending market. 

The UK Government announced 11^th July 2019, through the publication of the Draft Finance Bill, that it is going ahead with the reinstatement of Crown Preference in respect of VAT and PAYE.

PNC Bank, National Association, announced the closing of a $90 million senior secured credit facility for Iconex LLC (Iconex), a portfolio company of Greenwich, CT-based Atlas Holdings. PNC’s facility was provided in conjunction with a $67.5 million term loan and a $30 million delayed draw term loan provided by Cerberus Business Finance.

The SFNet Mentoring program, sponsored by the Secured Finance Foundation and the SFNet DEI Committee, has become a cornerstone of professional growth and community building within our industry. In this interview, we highlight the journey of Emily Neuherz, senior associate, Capital Foundry and a passionate advocate and past mentee of the program. Emily’s experience not only underscores the immense value of mentorship but also serves as a testament to the transformative impact it can have on career development. Through her story, we hope to inspire both new potential mentees and mentors to join our upcoming Fall iteration, and embark on a path of mutual growth, learning and success.

In a rapidly shifting financial landscape, the Secured Finance Network's recent webinar offered a deep dive into effective business development strategies within the secured finance sector. Moderated by James Kravitz, SFNet’s business development director, the session featured prominent industry experts Lance Rosenthal, executive vice president of business development at RelPro; Jack Penzi, director of originations at Great Rock Capital; and Mitch Sterling, chief client development and relationship officer at Blank Rome.

Banks and other lenders shared a mostly positive outlook for the asset-based lending market in the first quarter, fueled by predictions of a soft landing for the U.S. economy. But they are mindful of looming regulatory changes and continue to monitor portfolios for signs of post-pandemic stress, according to data released by the Secured Finance Network (SFNet).

In the dynamic world of secured finance, maintaining an edge is paramount. To meet the evolving needs of the SFNet community, we are launching an innovative and comprehensive certification program. The Secured Finance Network’s Secured Finance Certified Professional (SFCP) Program is designed to equip individuals with the knowledge and skills, necessary to excel in asset-based lending and factoring.

Sponsored by Goldberg Kohn, the essay contest serves as a platform to discuss cross-border trends and issues and gain industry recognition. 1^st, 2^nd and 3^rd place winners will be invited to present on a panel at SFNet’s 80^th Annual Convention in Houston, TX and have their essays published in The Secured Lender magazine. The contest is open to employees of SFNet member companies. Entry is free and all submissions must be received by June 25, 2024.

SFNet’s Women in Secured Finance Conference will be held June 12-13, 2024 at  Jay Suites Midtown East, New York, NY.  An event designed to cultivate leadership skills and connect with fellow trailblazers, the Conference is geared to both aspiring leaders and seasoned professionals who are looking to make an impact and expand their sphere of influence.

Savitri Ramjohn Hussain (Savi) migrated from Guyana, South America in 1984. She is a mom of four children and has three amazing grandkids. Savi Hussain serves as the head of underwriting and senior VP at Iron Horse Credit. She comes with a wealth of industry knowledge and 25 years of experience in asset-based lending including accounts receivable finance, inventory finance, purchase order finance and supply chain finance.

"Who's on First?" is a comedy routine made famous by American comedy duo Abbott and Costello.  The premise of the sketch is Abbot comically trying to identify to Costello the names of players on a baseball team that simultaneously leads to misunderstanding and frustration between the two.  Today, there are now enough ABL products to fill an infield with the latest one, First-Out ABL, being on first. The First-Out product is simply an asset-based loan within a term loan originated by a traditional cash flow lender. 

The Secured Finance Foundation has again joined forces with NYU Stern Executive Education to bring a multi-faceted learning experience taught by NYU Professor, Nathan Pettit coupled with real-world secured finance applications. This two-day course, held in person at NYU Stern, June 11-12, will introduce attendees to a variety of analytical frameworks while simultaneously modelling tactical approaches – all with the focus on developing leadership skills.

 

On April 23, 2024, the Federal Trade Commission (“FTC”) voted 3-2 to finalize and issue a rule banning virtually all noncompete clauses in employment contracts with extremely limited exceptions. The rule is set to go into effect 120 days after its publication in the Federal Register, which is pending. However, as explained below, it is uncertain whether this rule will go into effect due to the ongoing legal challenges surrounding the rule.