Articles

This article analyzes the conflict between federal and state marijuana laws, and its impact on the inability of state-legal marijuana businesses to obtain traditional and fundamental types of banking services from federally insured banks. This article is divided into three parts: (i) an explanation of the conflict of state and federal marijuana laws; (ii) the effect of the conflicting laws on the decision of banking institutions to provide services to state-licensed marijuana businesses; and (iii) congressional and judicial attempts to resolve the conflict between state and federal marijuana laws.

This is the first article in a three-part installment about the banking dilemma for state-licensed marijuana businesses in the United States.

A corporate scramble for cash and massive injections of liquidity by the Federal Reserve are reverberating across the balance sheets of U.S. commercial banks, with commercial and industrial loans registering the biggest week-over-week increase in more than 45 years.

C&I loans jumped 7.4%, or $176.17 billion, during the week ended March 18, according to seasonally adjusted data in the Fed's latest H.8 report on bank assets and liabilities. The data covers a week during which the crisis caused by the new coronavirus pandemic escalated rapidly. The Trump administration declared a national emergency March 13, and states placed increasing restrictions on public gatherings and business activity aimed at slowing the spread of the virus.

Gordon Brothers, the global advisory, restructuring and investment firm, has partnered with the investment banking firm Consensus to provide a $13 million term loan to Moda Operandi to support the sale of its business.

“The Gordon Brothers team was remarkable to work with,” said Stephanie Roberts, Interim Chief Financial Officer at Moda Operandi. “This was one of the best executed financings I’ve been through as they kept the process simple, straightforward and executed exactly what they said they would from the beginning.”

The events of 2020 have given commercial lenders the enormous opportunity of being the catalyst for helping to create greater economic stability. With the release of urgent stimulus programs, lenders must be nimble enough to make financing available to businesses that need it to keep their heads above water while they handle the COVID-19 effect on our economy. But at the same time, it is crucial for lenders to carefully mitigate risks and maintain strong lending practices to protect their organization so that they can continue to lend in a more uncertain world.

For astute lenders, it is possible to take steps to protect their business now and be poised for a bright future. To do this, what should lenders focus on to help them exceed expectations and achieve growth in a difficult time?

White Oak Commercial Finance LLC (“White Oak”), an affiliate of White Oak Global Advisors, LLC, announced it provided an $8MM credit facility to a global automotive supplier specializing in design, engineering, and manufacturing of mechatronic systems and lightweight solutions.

Restructuring Support Agreement Supported by More Than 75% of Senior Lenders; Files Voluntary Chapter 11 Petitions to Implement Financial Restructuring Plan

Men’s Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G Fashion Superstore Continuing to Serve Customers;

Company Continuing to Execute Against Previously Announced Plans to Reduce Headcount and Realign Store Footprint

Restructuring Supported by $500 Million in DIP ABL Financing from Existing Lenders; Expected to Convert to $400 Million in Exit ABL Financing to Support Emergence from Chapter 11

Pioneer has received a commitment for $75 million in debtor-in-possession ("DIP") financing from PNC Bank.  Upon Court approval, the new financing and cash generated from the Company's ongoing operations will be used to support the business during the reorganization process.  PNC has also committed to "roll" the DIP financing into an asset-based revolving credit facility at exit.

Santander Bank, N.A. (“Santander Bank” or “Santander”) today announced the appointment of Scott Baldinelli as Head of New England Middle Market Banking. Baldinelli will report to Joe Abruzzo, Head of Commercial Banking for Santander Bank.

Baldinelli will lead business development, market growth and relationship management for Commercial Banking’s middle market segment in New England, encompassing the company’s Boston-based location. The industry veteran will assume the role from Robert Cerminaro, who was recently promoted to Head of Mid-Corporate Banking in Santander’s Commercial Banking division.

The Secured Finance Foundation, a 501c3 organization, has been busy this past year rolling out new programs that benefit our industry. Some of the important initiatives from 2019 include commissioning and delivering a groundbreaking Market Sizing & Impact Study, with assistance from Ernst and Young, LLP, which is free to our members and donors..

Twin River Worldwide Holdings, Inc. (NYSE: TRWH) announced today that it had successfully syndicated an expansion to the term loan facility in its existing bank credit agreement by $275 million.  Funding, which is expected to occur on May 11, 2020, is subject to final documentation and customary conditions.

Borrowings under the expanded term loan facility will bear interest at LIBOR + 8.00% per annum through the 2026 maturity date.  The loan will be issued with an original issue discount of 97 and will be non-callable for 18 months.  After 18 months the loan is callable at a price of 104.5% of par, and after 30 months the loan is callable at par.

(Editor’s Note: SFNet invites feedback on this issue. Please send comments to mocejo@sfnet.com.)

Recently, lenders have confronted proposals for modifications to EBITDA allowing management to add back losses arising from the economic impact of COVID-19.  This has become known as “EBITDAC” with the “C” representing the financial consequences of the coronavirus pandemic.  The Credit Roundtable has said:  “We believe EBITDA calculations include many hypothetical, highly subjective and potentially misleading adjustments.” 

The Credit Roundtable and others have urged the market to resist such proposals so as to protect the position of lenders. 

While the additional addbacks do not seem to have hit the asset-based lending market in the same way that it may have the worlds of leveraged loans and investment grade lending, it is a point for asset-based lenders to watch for, as sponsors draw on practices from other markets for application to asset-based facilities.

What does it take to break the proverbial glass ceiling in secured finance? What does the journey to the “top” look like for women in financial services? We interviewed four C-Suite women and here is what they had to say. The women we spoke with are Meredith Carter, president and CEO, Context Business Lending; Miin Chen, COO, Siena Lending Group; Deborah Monosson, president & CEO, Boston Financial & Equity Corporation; and Jennifer Yount, partner, Paul Hastings LLP.

TSL Express’ senior editor sat down with Capstone Business Credit’s managing member, Joseph Ingrassia, and Romulus Entertainment’s founder and CEO, Brad Feinstein, to discuss a unique partnership in film finance.