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The recession of 2008-2009 brought many lessons to the lending community; and the small independent finance companies were no exception. When looking back at that period, many of the lessons that we should all remember occurred in 2005-2007, during the lead up to the recession.

If you’ll recall, the economy was strong and business was booming. For small independent finance companies (that typically run counter-cyclical), new business was harder to come by and highly competitive. As is often the case, this led to aggressive structures and lower pricing, a bad combination.

The PNC Financial Services Group, Inc. (NYSE: PNC) and the Spanish financial group, Banco Bilbao Vizcaya Argentaria, S.A. (NYSE and MAD: BBVA) today announced that they have signed a definitive agreement for PNC to acquire BBVA USA Bancshares, Inc., including its U.S. banking subsidiary, BBVA USA, for a purchase price of $11.6 billion to be funded with cash on hand in a fixed price structure.

BBVA USA Bancshares, with $104 billion in assets and headquartered in Houston, Texas, provides commercial and retail banking services through its banking subsidiary BBVA USA and operates 637 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico. When combined with PNC's existing footprint, the company will have a coast-to-coast franchise with a presence in 29 of the 30 largest markets in the U.S.

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.

After careful review, the Advocacy Committee of SFNet  determined that we should provide additional comments to the Fed and Treasury in an effort to make the Main Street Loan Programs better suited to ABL lenders.   Among key issues raised were (i) making it available to nondepository lenders so that they may, in turn, serve their borrowers; (ii) reducing the minimum on the MSELF from $10 million to $1 million; (iii) eliminating the requirement that any Main Street loans be pari passu with the ABL facility and collateral; (iv) ensuring that participation in the loans is guaranteed to be in the program prior to lender funding and (v) eliminating EBITDA as a metric for both eligibility and loan sizing. Please click here to view the letter.

Ares Commercial Finance announced that it has provided a senior secured revolving line of credit to Stevens Aerospace and Defense Systems LLC.  The company is owned by principals of the NTC Group, Inc.  Proceeds of the financing will be used to refinance the company’s existing credit facility and to provide ongoing working capital support.

Citizens announced today that it served as Lead Left Arranger for Houston-based Moda Midstream’s $300 million senior credit facility in which seven financial institutions participated.

Moda is a Texas-based infrastructure company that stores and handles liquid products that are essential to our economy and our way of life. Moda is a trusted, innovative partner dedicated to safely, reliably and efficiently moving liquids from origin to destination.

At SFNet we realize how important it is to stay plugged into what’s happening on a local and global scale and understand how the latest developments are impacting our industry, especially during this time of unprecedented disruption. Although we can’t meet face-to-face right now, we can come together virtually to learn, exchange ideas and tackle some of the most pressing issues facing the secured finance community.

Over the next couple of months, SFNet is moving all in-person education courses online, introducing new webinars—both industry-focused content as well as trending topics of interest, and reformatting our planned live events to virtual platforms followed by re-scheduled in-person meetings at a later date.

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.

Under Section 1106 of the CARES Act, Paycheck Protection Program (“PPP”) loans can be forgiven, in whole or part, under certain conditions.  The SBA has continued to release guidance with respect to the lender review process for loan forgiveness applications, most recently in the form of an Interim Final Rule published May 22, 2020. 

This new rule, the SBA Loan Review Procedures and Related Borrower and Lender Responsibilities (“Loan Review Process IFR”), provides important additional guidance with respect to a lender’s responsibilities for processing loan forgiveness applications in a timely and compliant manner.  The rule also describes the circumstances under which a lender may lose its processing fee, and potentially, the loan guaranty. 

While further guidance is expected, the Loan Review IFR outlines the general process for submission and processing of the loan forgiveness applications.

ForwardLine Financial, a leading provider of financing to small businesses, secures new credit facility from Ares Management.

ForwardLine Financial, a leading direct lender of small business loans, announced today that it has secured a new senior credit facility from funds managed by the Alternative Credit strategy of Ares Management. As part of this announcement, the company also shared that it has raised additional capital from Five Oceans Capital, a long-term investor in the company.

Corporate entities often turn to asset-based lending (ABL) as a strategic way to fund acquisitions, reduce capital volatility inherent in cash flow structures, or simply to accelerate growth. Secured by company assets, this alternative path to cash flow financing has historically followed the same process: companies choose a lending institution based on the most attractive deal structure, accept its deal terms, and undergo a field exam and asset appraisal to determine the appropriate borrowing terms.

The European Union’s recent passage of its Sustainability Financial Disclosure Regulation marks yet another milestone in the progression of environmental, social and governance matters. This article will review this regulation and related ESG disclosure requirements, together with other notable ESG developments, and discuss their impact on middle-market lenders.

The increase in loan and lease defaults in the wake of COVID-19 has brought to the forefront numerous legal defenses by borrowers and tenants, such as force majeure, impossibility, and frustration of purpose.  Force majeure allows a party to suspend or terminate their obligations when certain circumstances beyond their control arise.  Impossibility applies when the destruction of the subject matter of the contract or the means of performance makes contract compliance objectively impossible.  Frustration of purpose applies when a change in circumstances makes one party’s performance virtually worthless to the other.  The decision whether to permit these defenses boils down to allocation of risk, specifically (i) who should bear the risk of unforeseen circumstances, such as the pandemic; and (ii) does the governing contract address the allocation of risk?

Otterbourg P.C. announced today that Valerie S. Mason and Nneoma A. Maduike have been named Co-Chairs of the firm’s Lender Finance Practice Group.

Otterbourg’s experienced Lender Finance team advises and represents the largest US and global institutional lenders and regional banks, as lenders and mature lenders, sponsor supported companies, and strategics, ranging from start-ups to mature traditional lenders and funds, merchant cash advance companies, asset-based lenders, factors and fintech lenders, as borrowers, in “lender to lender” secured revolving credit and term loan facilities.

Bantry Bay Capital Limited (“Bantry Bay” or the “Company”), the specialist lender, has established a joint venture partnership with funds advised by Elliott Advisors (UK) Limited and its affiliates (together “Elliott”). Elliott Advisors (UK) Limited is an affiliate of Elliott investment Management, L.P., the global fund manager with approximately $41.8 billion in assets under management.