Last night the House and Senate approved a $900B next round of economic stimulus. The full text of the bill can be found here as well as a detailed summary. SFNet’s Advocacy Committee is reviewing the language and will hold an informative webinar as soon as practical in January. In the meantime, you may wish to consult your advisers. In addition to other broad reaching measures, the statute provides for:

• PPP extended through March 31, 2021
• CECL and TDR provisions potentially deferred until January 2022
• Additional allocations for EIDL Grants
• ERTC extended and expanded
• Rescission of emergency lending facilities, including MSLP, in their current form

36th Street Capital Partners LLC (“36th Street Capital”), an independent provider of alternative funding solutions for the equipment financing industry, announced the appointment of Wayne Tentler as Executive Vice President of Sales.

The addition of Mr. Tentler provides 36th Street Capital an opportunity to develop new client relationships while expanding the company’s position in the marketplace. Based in the Sarasota, FL, Wayne brings over 15 years of experience in corporate finance, including most recently serving as Commercial Leader for one of GE Capital’s Industrial Financing units.

This year’s YoPro Leadership Summit, held virtually August 26-27, 2020 brought together the young professionals of the secured finance industry for opportunities to hear from industry leaders, connect with peers, and to discover together how to find success in the post-COVID environment. This year's theme was "Succeeding in the New Environment."

FGI Worldwide LLC (“FGI”) is delighted to announce the completion of a $40MM ABL facility for ScanSource’s former business in Europe. The facility was used, in part, to fund a portion of the acquisition by a Charlotte-based family office and to support the company’s future working capital requirements. The new Company will be headquartered in Brussels, Belgium. They are a leading global provider of technology products and solutions. 

A trend towards superpriority debt exchanges that has begun appearing in out-of-court restructurings will continue to cause worry amongst minority debt holders and will likely result in continued litigation regarding the propriety of such exchanges. Examples of such troublesome exchanges began with an exchange conducted by Serta Simmons Bedding, LLC (“Serta”) and has continued with structurally similar transactions conducted by other companies, including Boardriders, Inc. (“Boardriders”) and TMK Hawk Parent, Corp. (“TriMark”).  

Tyler Layne and Lee Sands, attorneys at Waller Law cover three recent out-of-court debt transactions that have introduced a novel way for majority lenders and borrowers to improve their position at the detriment of the non-participating/minority lenders.

Conducive factors include high market liquidity, low interest rates, accommodative Fed policy and a vaccination against COVID-19

The year 2021 is shaping up to be a strong and supportive one for leveraged finance, led primarily by merger-and-acquisition (M&A) and refinancing activity, according to the Capital Markets group at Mitsubishi UFJ Financial Group (MUFG). 

Key members of the group delivered their outlook for leveraged finance to reporters and editors at a virtual MUFG media roundtable earlier this month that featured Jeffrey Knowles, Co-Head of Debt Capital Markets; Grant Moyer, Head of Leveraged Capital Markets; and Art de Peña, Head of Loan Syndications and Distribution.

CIT Group Inc. (NYSE: CIT) today announced that its Power and Energy business served as coordinating lead arranger on a $323 million refinancing of the Coso Geothermal power facility in Southern California.

Originally developed in 1987, the 142-megawatt Coso Geothermal facility has been a steady source of renewable power for the Southern California region for more than three decades. The Coso site is considered one of the top three producers of geothermal electrical power in the United States.

The COVID-19 crisis of 2020, like a stress test for businesses and funders, created a landscape of winners and losers. For those passing the test, there are more lending options and potential buyers as M&A activity begins to sprout.

Some had a good “runway” ahead of the regional lockdowns; they were already digital companies or were well capitalized. Others enjoyed being in high-demand sectors such as groceries, technology, home goods, outdoor products, and delivery transportation.

For those companies that were well positioned or adapted quickly, business growth continues, and for those more challenged due to business restrictions, secured finance has been invaluable, along with government rescue loans. This was a repeated theme throughout the annual SFNet Convention held virtually November 17-19. This article covers many of the 34 presentations on the theme: “This Way Forward.”

Goldman Sachs & Co. LLC is serving as financial advisor to Huntington.  Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Huntington.

Keefe, Bruyette & Woods, a Stifel Company, is serving as financial advisor to TCF.  Simpson Thacher & Bartlett LLP is serving as legal advisor to TCF.

Runway Growth Credit Fund Inc., a leading provider of growth loans to both venture and non-venture backed companies seeking an alternative to raising equity, announced that it has expanded and amended its credit agreement with KeyBank Specialty Finance Lending and other lenders. The Revolving Credit Facility provides for borrowings up to a maximum aggregate principal amount of $215M, with an accordion feature that enables Runway Growth to increase the aggregate commitments up to $300M.

Three new banks, MUFG Union Bank N.A. (co-documentation agent and lender), Bank of Hope (lender), and First Foundation Bank (lender), join KeyBank Specialty Finance Lending (administrative agent, syndication agent and lender) and CIBC Bank USA (co-documentation agent and lender) as parties to the Revolving Credit Facility in support of the Fund's growth. 

It is an unfortunate reality that, as the economic repercussions of the COVID-19 pandemic continue to be felt, an increasing number of businesses will face financial and operational distress. For many of these businesses, bankruptcy may be an appropriate or necessary path to restructure their balance sheets. However, it is not the only option and lenders must keep that in mind as companies increasingly default under their credit agreements.

Bankruptcy can be an extremely useful tool for restructuring a company, but can also be expensive, lengthy and frustrating. That’s why more lenders are considering a Strict Foreclosure process executed under Article 9 of the Uniform Commercial Code. This strategy can offer many of the same benefits as a bankruptcy filing while requiring less time and fewer financial resources. In order to properly assess the benefits and risks of this approach, lenders must have a firm grasp on what it entails, when best to use it, as well as how to manage people throughout the process.

BDO USA, LLP announced that Brent Worthy recently joined the firm’s Business Restructuring and Turnaround Services practice, with a primary focus on covering the Southwest regional markets. Worthy, a seasoned leader in the management consulting space, has more than 15 years of experience creating and preserving value for organizations through corporate restructuring, M&A strategy and execution, and digital finance transformation.

Citizens announced today that it has provided a new asset-based revolving loan to Warminster, PA-based W. Atlee Burpee Company. Citizens is the sole lender.

Founded in 1876, W. Atlee Burpee Company is engaged in the wholesale distribution, direct marketing and retail sale of vegetable and flower seeds, plants, horticultural and other related products.

The Q3 2020 Asset-Based Lending Index reflects improving confidence for lenders, fears of a double-dip downturn subsiding, and exhibits the continuing impact of PPP funds distributed in April. The U.S. economy rebounded during Q3 as lockdowns subsided, leading to a GDP surge of 33%. This growth had a clear impact on portfolio health with non-accruals, special mention, and write-offs reducing quarter over quarter.

While sentiment from both bank and non-bank lenders was more positive from Q2, the overarching theme of Q3 can be told by the continued decline in utilization for both bank and non-bank lenders alike. Bank groups set their lowest level in the five years since these figures were collected by SFNet, with 75% of banks reporting decreases. Non-bank usage reduced slightly over the previous quarter but are back to levels not seen since the first and second quarter of 2017. 

When a creditor, whose debtor filed for bankruptcy relief, sought adequate protection payments as a secured creditor, his status as a secured creditor was challenged by an Official Committee of Unsecured Creditors. Based upon filing errors he had committed, he was declared an unsecured creditor of the estate.  Official Committee of Unsecured Creditors of Rancher’s Legacy Meat Co. v. Ratliff, 616 B.R. 532 (Bankr. D. Minn. March 23, 2020).

This case points out the critical importance of familiarity with subsequent events that can make a UCC filing seriously misleading, what to do to avoid its characterization as seriously misleading, and within what time period, so as to prevent later continuation statements to be ineffective and cause the supposed secured creditor to be deemed unsecured.

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