Articles

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.

CIT Group Inc. (NYSE: CIT) today announced that CIT Northbridge Credit, as advised by CIT Asset Management LLC, served as sole lead arranger on a $20 million senior secured credit facility for Laurel Grocery Company LLC.

Headquartered in London, Kentucky, Laurel Grocery is a wholesale distributor of grocery products to more than 160 independent grocers in Georgia, Indiana, Kentucky, Ohio, Tennessee and West Virginia. The company, founded in 1922, also provides a range of business services, including accounting, insurance, merchandising, advertising and third-party warehousing and logistics.

Proceeds will be used to repay debt, finance growth initiatives and support ongoing operations.

CIT Group Inc. (NYSE: CIT) today announced that its Technology, Media and Telecommunications business served as co-lead arranger and joint bookrunner for a $165 million financing on behalf of iEnergizer, a leading technology services and media solutions company.

The financing, which includes a $150 million term loan and a $15 million revolving credit facility, will be used to refinance existing debt and fund a dividend to shareholders.

Founded in 2000, iEnergizer provides technology-enabled services to clients across a wide range of industries, including gaming, healthcare, publishing, travel, and financial services.

Enhances and diversifies CIT’s funding profile with Mutual of Omaha Bank’s market-leading homeowners association banking business, a source of scalable lower-cost deposits. Extends middle market commercial banking capabilities with expanded products, technology solutions and geographic footprint, Advances strategic plan and accelerates shareholder value creation.

Rising Together. This concept serves as both the theme for this month’s issue and SFNet’s upcoming online conference Women in Secured Finance: Where Women Rise. 

During this challenging time, it’s more important than ever to highlight and celebrate the contributions and accomplishments of women in our industry. Statistics show that the pandemic has had serious effects on women in the workplace, as we struggle with added pressures on the job, increased unemployment and increasingly challenging caregiving responsibilities. 

Vivint also announced that, concurrently with the Notes offering, the Issuer refinanced its existing credit facilities with (i) a new $1,350.0 million first lien senior secured term loan facility maturing in 2028 (the “New Senior Secured Term Loan Facility”) and (ii) a new $370.0 million senior secured revolving credit facility maturing in 2026 (the “New Senior Secured Revolving Credit Facility” and, together with the New Senior Secured Term Loan facility, the “New Senior Secured Credit Facilities”), with lenders party thereto and Bank of America, N.A. as a lender, administrative agent and collateral agent.

With over $370 trillion of global financial contracts referencing LIBOR (London Inter-bank Offered Rate), many oil and gas companies are curious about how the phase-out of LIBOR by 2021 could impact their organization. Many companies are beginning to ask how this transition will impact their organization and what steps can be taken now. The following is a discussion of:

• why LIBOR is being phased out;
• the transition plan for the phase-out;
• items companies should consider; and the steps that can be taken now.  

Greater focus placed on domestic deals, albeit majority of U.S. M&A leaders acknowledge that capturing full deal value is a growing sore spot.

The COVID-19 pandemic continues to wreak havoc across the country. Millions of small businesses are struggling, with many having closed and others on the verge of shuttering.

A recent Harvard Business School survey of 5,800 businesses reveals the median business with $10,000 or more in monthly expenses usually lacks sufficient ready cash to cover two weeks of spending.

Not surprisingly, small business defaults are up considerably. From roughly two percent of small business debt last year, they now consist of 2.7 percent of small business debt. The future does not look bright. By 2021, default rates may rise to as high as five to six percent, according to models.  

The new Company Stabilisation and Restructuring Act (StaRUG for short) entered into force on January 1, 2021. It is based on a European directive on the introduction of a pre-insolvency restructuring procedure, which was adopted in June 2019.

The intention is to facilitate early restructuring of companies and in any case before insolvency occurs. The idea is to avoid the disadvantages of insolvency - a possible loss of reputation and high costs for the affected company, disruption to trade and to safeguard employment.

Encina Capital Partners, LLC (“Encina”) and an affiliate of certain funds managed by Oaktree Capital Management, L.P. (“Oaktree”) announced today that they have launched Encina Lender Finance, LLC (“ELF”), a new independent lender finance platform targeting commercial and consumer specialty finance companies in the U.S. and Canada.

Headquartered in Atlanta, ELF offers revolving lines of credit and term loans ranging in size from $10 - $40 million to specialty finance companies (sponsored and non-sponsored) across a wide range of asset classes including, but not limited to, asset-based lending, factoring, equipment leasing, floorplan financing, commercial real estate bridge lending, tax lien/deed financing, venture debt lending, SMB lending & merchant cash advance, middle-market private credit, charged-off debt buyers, rent-to-own consumer leasing, unsecured consumer lending and specialized student lending.

CIT Group Inc. (NYSE: CIT) today announced that its Power and Energy business served as coordinating lead arranger for approximately $200 million in financing for the 149-megawatt Big River solar power project in White County, Illinois.

The project sponsor is D. E. Shaw Renewable Investments (DESRI), a leading provider of cost-effective renewable energy across North America. DESRI is part of the D. E. Shaw Group, a global investment and technology development firm with more than $55 billion in investment capital.

The industry worldwide was profoundly shaken by the events of 2020, and the two-day SFNet International Lending Conference provided attendees with a broad global view of economic recovery and a deep dive into the new normal of covenants, risk management and other areas of the secured finance business.