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Significant disruptions in credit quality have facilitated the need for field examiners to be on alert for situations that are generally not prevalent in a more stable environment. 

Libby Gill is a leadership speaker, executive coach and author. She is also is the CEO of Libby Gill & Company, an executive coaching and leadership consulting firm, guiding clients and their teams through change, challenge and chaos. Previously, Gill was senior vice president at Universal Studios Television, and vice president at Sony Pictures Television and Turner Broadcasting.

Libby is the author of five books, including the award-winning “You Unstuck, Capture the Mindshare and the Market Share Will Follow, and Traveling Hopefully. Her latest book is “The Hope-Driven Leader: Harness the Power of Positivity at Work.” She is a former columnist for The Dallas Morning News.

Great Rock Capital, an asset-focused commercial finance company specializing in middle market lending, announced the close of a $100 million leverage facility with KeyBank National Association, one of the nation’s largest bank-based financial services companies headquartered in Cleveland, Ohio.

The new facility will provide Great Rock Capital with further flexibility to offer creative financial solutions that maximize liquidity to middle market borrowers and will position the firm for continued growth.

Siena Lending Group LLC (“Siena”) announces the closing of a three-year $9.0 million revolving credit facility for the subsidiaries of Interactive Health, Inc., Human Touch LLC and Relax the Back Corporation. The asset-based credit facility was used to refinance existing debt and provide additional working capital to support business growth.

The time and cost of liquidating collateral can often be prohibitive and is always a nuisance. Of course, this problem is exacerbated when the asset value is less than the balance owed to the secured creditor(s), leaving no value for unsecured creditors. Lenders often step up and carve out an amount to be distributed to unsecured creditors to enable a Chapter 11 to proceed to effect a sale of the debtor’s assets free and clear of liens. Some consider this to be a price to be paid by secured creditors for the privilege of utilizing the bankruptcy court to sell their collateral. Thus, the cost of a bankruptcy can be very expensive not only to the debtor, but also to the secured lender. As a result, small and middle-market companies and their lenders have grown receptive to non-bankruptcy vehicles for the disposition of assets.

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. 

Greensill Capital is a UK-based commercial finance company which filed for bankruptcy protection in early March. The company had focused on providing financing to companies using supply chain financing and other related receivables finance services. 

The bankruptcy appears to have been the result of a combination of factors: unusual underwriting practices (by Greensill, their primary financier and their credit insurer); the cancellation of their credit insurance policy; the cessation of their source of financing by their largest funder and financial intermediary;  related party transactions inclusive of financing, as well as obtaining financing from one of their investors and in turn using such funding to finance the investor’s own affiliates.

While the final outcome remains to be seen in the ongoing saga, it is clear the circumstances are not typical for a supply chain finance institution. 

EPSG, a leading integrator of payment technology solutions, announced today that it has entered into a revolving credit facility (“The Credit Facility”) with People’s United Bank (“People’s United”), N.A., a subsidiary of People’s United Financial, Inc. PBCT, -0.52%, and has adopted their eTreasury + Business Online Banking System and Wire Transfer Service (“Platform”).

Golub Capital BDC, Inc. (the “Company”, “we”, “us” or “our”) a business development company (Nasdaq: GBDC), today announced the closing of a new senior secured syndicated revolving credit facility (the “Facility”). The Facility is led by JPMorgan Chase Bank, N.A. and includes a total of six bank participants.

The Facility closed on February 11, 2021. Under the Facility, the lenders have agreed to extend credit to us in an initial aggregate amount of up to $475.0 million in U.S. dollars and certain agreed upon foreign currencies with an option to request, at one or more times, that existing and/or new lenders, at their election, provide up to $237.5 million of additional commitments.

By now, most lenders and their counsel have heard about the February 16, 2021 decision of the U. S. District Court for the Southern District of New York in Citibank N.A. v. Brigade Capital Management, L.P, which held that certain lenders to Revlon who received payments by mistake from Citibank were in fact entitled to keep those payments. 

The magnitude of the funds transferred is just one of the eye-catching elements of the case.  On August 11, 2020, Citibank, which had been the agent for a syndicate of term lenders to Revlon, mistakenly transferred approximately $900 million to a group of the lenders.  According to Citibank, it had intended to send a much smaller amount, around $7 million, solely to cover an interest payment then due on the loans, but a problem with its loan processing system resulted in the overpayment.  Typically, you would expect lenders receiving the money by mistake just to return it—after all, you never know when you might be the one mistakenly sending the money.  And, in fact, a number of the lenders did just that—but one group, did not. 

White Oak Commercial Finance ("White Oak"), an affiliate of White Oak Global Advisors, is pleased to welcome Mike Earnhart as Senior Vice President, Managing Director of Originations. Mr. Earnhart will be based in Los Angeles with national coverage responsibilities.

Mr. Earnhart is an accomplished financial industry executive with in-depth experience in factoring, asset-based lending, banking and territory sales management. He served on the Board of The Professionals Club and was formerly the Committee President of City of Hope’s Fashion & Retail Group, where he is still an active member.

Kristen Holihan is a Senior Vice President, Senior Business Development Officer for Bank of America Business Capital (BABC), the asset based lending team at Bank of America. Kristen is responsible for identifying and engaging new ABL opportunities and working with potential borrowers to get a new ABL revolver structured and closed. She is focused on covering private equity groups, advisors, middle market companies, and large corporate companies, in both Metro New York and Upstate New York, to deliver these solutions. Kristen has also spent significant time as an ABL underwriter, as well as on the Leveraged Finance Origination and Capital Markets teams. Kristen graduated from Babson College in 2012 with a Bachelor of Science (concentration in finance). She will also be starting the Executive MBA Program at Columbia University in August 2021. Kristen is a member of the Diversity Equity and Inclusiveness Committee for the Secured Finance Network, as well as a member of the Diversity and Inclusion Council at Bank of America.

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.