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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?

IDB Bank®, a New York-based private and commercial bank, announced that Ran Fuchs was named senior vice president and head of Capital Markets by IDB Capital, the broker-dealer subsidiary of IDB Bank.  

Fuchs' role at IDB Capital follows years of financial and investment experience. With over a decade of experience teaming up with investors and their advisors, Fuchs has raised over $1 billion in equity capital for Equity REITs, Mortgage REITs, BDCs, REG-Ds, DST/1031s and other investments in that space where financial services and income-producing investments intersect.

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!

CIT Group Inc. (NYSE: CIT) today announced that it has named Chris Esposito as managing director in charge of its newly expanded Asset-Based Lending business.

In this role, Esposito is responsible for managing the Asset-Based Lending team, overseeing the national ABL business, building new client relationships, developing strategies to address new target markets and ensuring outstanding customer service and satisfaction.

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.

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.

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.

Wingspire Capital LLC (“Wingspire”) announced that it has agented a $100 million credit facility consisting of an $80 million senior credit facility (co-led by Ares Commercial Finance) and a $20 million second lien credit facility (provided by Atalaya Capital Management) to Rubies II, LLC (“Rubies II”).

Proceeds from the financing were used to purchase substantially all of the assets of Rubie’s Costume Company, Inc. (“Rubie’s”) via a Chapter 11 363 sale process.  Proceeds will also be used to fund the on-going working capital needs of Rubies II. 

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.

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.