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Northbrook-based private equity firm plans for succession

Big Shoulders Capital Chairman David Muslin has announced an expanded leadership team as the company plans for the next generation of growth. Joe Prudden has been promoted to President of the company from Chief Financial Officer, Alex Mazer is promoted to Executive Vice President from Vice President, Howard Spivack is promoted to Chief Financial Officer from Finance Director, and Evan Zwerman joins the company as Senior Vice President of Originations.

What are some effective ways to approach management regarding the sensitive topic of compensation, particularly as it relates to peers in the same role, and also within the current overall market?

First Eagle Alternative Credit, LLC (“First Eagle” or the “firm” ) today announced that it has added asset-based lending solutions to its direct lending platform and appointed industry veterans Larry Klaff and Lisa Galeota to lead this initiative at the firm.

Klaff and Galeota join First Eagle from Gordon Brothers Finance Company, a majority-owned portfolio company of BlackRock Capital Investment Corporation, where they worked together and at its predecessor firm for over 13 years. During that time they sourced, originated and structured asset-based facilities valued at over $1 billion across a wide variety of industries. They will be based at First Eagle’s Boston office and will report directly to Chris Flynn, President of First Eagle Alternative Credit.

It is not everyday that you are given an opportunity to live out the career you would have in an alternate universe, but that is exactly what happened to me, thanks to the SFNet Guest Lecture Program and SFNet MidWest Chapter President Jennifer Kempton, who kindly asked me to be the Guest Lecturer.   

Last month, Sarah Fyffe, vice president, Asset Based Lending, BMO Harris Bank, and I were able to virtually present ABL 101 to Professor Gregory Udell’s Entrepreneurial Finance Class at Indiana University on April 5.  It was without a doubt one of the coolest things I have ever done in my career and I am so grateful to have been involved. Education and mentorship are my favorite part of the job and, to do so in a university setting, was an incredible experience.  For Sarah, it was a chance to lecture to a classroom where she once sat as a student in Professor Udell’s class.  Talk about coming full circle!

JPMorgan Chase Bank, N.A., Citi and TD Securities are acting as lead arrangers and active bookrunners for the Senior Secured Credit Facilities.

CIT Group Inc. (NYSE: CIT) today announced that its Asset-Based Lending business served as agent and sole lender on a $75 million revolving credit facility for Skillsoft, a global leader in learning and talent management solutions

Based in Boston, Massachusetts, Skillsoft enables organizations to unlock the potential in their employees by delivering a range of digital learning and talent management solutions. The financing will be used to support continuing business operations and growth objectives.

Greg Eck and Bill Stapel are the new leaders of the ABL Group at Fifth Third Bank, N.A., one of the nation’s largest asset-based lenders, with $8.1 MM in commitments and serving customers in 38 states, Canada and Europe. They step into their roles following the retirement of Fifth Third Business Capital President Mike Sharkey, who was also past president and chairman of Secured Finance Network.

When asked, “Is technology empowering or overshadowing expertise in asset-based lending?” the answer is simple: Yes.

We’re in an era where technology’s efficiency and human expertise should work together, and if balanced thoughtfully, we can absolutely have both. But this requires intention. As we lean into technology, we must preserve the critical thinking that defines the art of ABL.

Wintrust Business Credit (WBC), the asset-based lending (ABL) unit of Wintrust Commercial Banking, today announced plans to expand its geographic reach from a regional provider to a national ABL platform.

Since its founding in 2008, WBC has provided best-in-class asset-based lending solutions with a focus on middle-market businesses in the Wintrust footprint. 

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.