Allou: A Firsthand Account of a Massive ABL Fraud - FEATURE STORY: PART 1 OF 2 One of the biggest frauds ever perpetrated against ABL lenders ...
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THE VALUATION & APPRAISAL ISSUE
JIUNE/JULY 2021 WWW.SFNET.COM
Putting Capital To Work
FEATURE STORY:
PART 1 OF 2
Allou: A Firsthand Account
of a Massive ABL Fraud
One of the biggest
frauds ever perpetrated
against ABL lenders.
A publication of:
CLEAR THINKING GROUP
Clarity of thought, flawless execution.
20 years of experience.
Turnaround Management Financial Restructuring
Strategic Advisory Creditors' Rights
WWW.CLEARTHINKINGGROUP.COM
NEW JERSEY 908.431.2121
NEW YORK 516.680.1945
TOUCHING
BASE
ADAPT. RENEW. GROW Of course, the industry’s
SFNet Returns
most-attended event is the
Annual Convention. SFNet’s
77th Annual Convention:
to Live Events
Adapt. Renew. Grow! will
be held in-person at the
JW Marriott Desert Ridge
in Phoenix, AZ, November
For over a year now, I’ve used this space, as well as all mediums 3-5, 2021. The venue is
at our disposal, to connect with the SFNet community. Like all fabulous and affords plenty
of us, I’ve missed being able to meet in-person. But despite of outdoor gathering space
the loss of these interactions, we’ve been patient and creative as well as world-class
and managed to stay connected in our socially distanced golf and recreation. For
environment. Having a strong community to rely on in good times those who are not ready
and challenging times is a vital part of what SFNet is about. to interact face-to-face, or
We’ve had thousands of members participate in our virtual not yet able to travel, we’ll RICHARD D. GUMBRECHT
events, our Crucial Conversations Webinar series, our virtual provide a virtual attendance SFNet Chief Executive Officer
education and on-demand courses, as well as our discipline- option supported by our
specific, peer group Member Forums. We’re a resilient bunch who SFNet Connect platform. With a hybrid structure, we’re poised to
found innovative ways to keep business moving forward despite have the most inclusive Convention ever. Please visit www.sfnet.
the obstacles that the global pandemic presented. com for registration details.
As we emerge from all this, our Innovation Conference: The The pandemic had a significant effect on so many sectors of
Future of Work, to be held live-online on July 14 and 21 will dive our industry, particularly appraisals and valuations, which is the
into what our new world will look like going forward. From the focus of this issue. In Challenges and Opportunities Along the
social, technological, and legal issues around our return to the Road to Electric Vehicle Proliferation on page 18, Keith Spacapan
office (or not), to accelerating adoption of emerging technologies of Hilco’s automotive practice provides an overview of the electric
that are transforming secured lending – this highly interactive, vehicle industry and tips for lenders involved in the space.
unlimited-attendance-for-member-company meeting should not On page 22, get a rare glimpse into a major ABL fraud. Mark
be missed. Fagnani, who was directly involved from day one in the Allou
At long last, I’m excited to now be able to discuss our Healthcare case, reveals how the fraud was perpetrated and how
upcoming live and hybrid events, starting with SFNet’s YoPro it was discovered. It’s a riveting story.
Leadership Summit, August 3-4. This hybrid event will bring Despite the devastating effects of the ongoing COVID-19
together the young professionals of the secured finance industry pandemic, the construction and building products industries
for opportunities to hear from industry leaders, connect with in the U.S. adapted and many sectors experienced significant
peers, and discover how to succeed in our changing industry growth during 2020. Turn to page 30 for an overview of the
environment. The live component will include activities in industry by Erick Beaudoin of Gordon Brothers.
Chicago, including golf at Medinah Country Club, a cocktail The COVID-19 pandemic caused ecommerce to transition from
reception, and a dine-around event. Please reach out to Eileen “convenient” to “essential,” but what does the post-pandemic
Wubbe ewubbe@sfnet.com for further details. world hold for this sector? Executives from HYPERAMS cover this
Our first fully in-person event will be the SFNet Independent sector on page 34.
Finance Roundtable, August 17-19 in Chicago. Panelists and On page 38, in Restaurant Rebound Tests the Limits of
attendees will come together to discuss the state of M&A, legal U.S. Food Distributors, Eric Schloemer of Tiger discusses how
issues impacting our industry, and other timely topics that foodservice distributors generally adapted well to the massive
may affect your business. This is an invitation-only event for disruptions triggered by the pandemic, but the sector is feeling
senior executives. Please reach out to Rob Meyers, our event the strain of the rapid return of tens of millions of Americans to
chairperson, if you are interested in attending. in-person dining. 1
For our SFNet 40 Under 40 Awards celebration on September Looking forward to seeing you in person soon! THE
9, we’ll be trying something new: hosting the event virtually in SECURED
LENDER
conjunction with the opportunity to attend an exclusive reception JUNE/JULY 2021
during SFNet’s Annual Convention. This will be a joint event
celebrating the classes of 2020 and 2021. We look forward to
honoring these outstanding future leaders. Details will follow
soon!
TABLE OF CONTENTS. JUNE/JULY 2021 VOL. 77 ISSUE 5
COVER STORY
ALLOU – A FIRSTHAND ACCOUNT
OF A MASSIVE ABL FRAUD P22
Allou – A Firsthand Account of a Massive ABL Fraud
Allou Healthcare was one of the biggest frauds ever perpetrated against ABL lenders. What follows is a description
of the case from an individual who was directly involved from day one. TSL will be publishing the entire article in two
installments. In Part One, you will read how the fraud was perpetrated and how it was discovered. 22
BY MARK FAGNANI
FEATURE STORIES
Challenges and Opportunities Along the Road to Construction Continues
Electric Vehicle Proliferation to Adapt Amid Increasing
Keith Spacapan of Hilco’s automotive practice provides an overview of the Costs and Labor Shortages
electric vehicle industry and tips for lenders lending in the space. 18 Despite the devastating effects of
BY KEITH SPACAPAN the ongoing COVID-19 pandemic, the
construction and building products
industries in the U.S. adapted and
many sectors experienced significant
growth during 2020. 30
BY ERICK BEAUDOIN
Trends in E-commerce
2 During and Post-Pandemic
THE
SECURED The COVID-19 pandemic caused
LENDER
JUNE/JULY 2021 ecommerce to transition from “conve-
nient” to “essential,” but what does
FEATURED STORY the post-pandemic world hold for this
CHALLENGES AND OPPORTUNITIES ALONG THE sector? 34
ROAD TO ELECTRIC VEHICLE PROLIFERATION P.18
BY JONATHAN DEPTULA AND
THOMAS PABST
FEATURED
STORY
TRENDS IN E-COMMERCE DURING
AND POST-PANDEMIC P34
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BY EILEEN WUBBE Eileen Wubbe 3
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DEPARTMENT
DEPARTMENT
NETWORK
INDUSTRY
NOTES
MOVES
Axiom Bank, N.A. Hires New AVP, Services business. DeRosa, a vice team as vice president, ABL principal. In
Marketing Manager president, will be based in Los Angeles addition, John Littrell was promoted to
Victoria Lowe was appointed AVP, and will focus on business development group head portfolio management. Alverio
marketing manager. Lowe brings more across a wide range of verticals joins as vice president, ABL principal
than three decades of experience supported by Commercial Services. and brings nearly 25 years of banking
in branding, advertising and experience to Fifth Third, including more
communications for banking and finance Citizens Business Bank Hires President than a decade in asset-based lending.
enterprises. Lemons joins as vice president, ABL
CVB Financial Corp., the holding company
principal and has seven years of industry
for Citizens Business Bank, is pleased to
experience. Littrell is a 33-year veteran of
Axiom Bank N.A. Promotes Joe Dear to announce the appointment of Brian T.
the ABL industry with a focus on serving
SVP, Commercial Market Executive for Mauntel as the president of CBB. In his
middle-market companies.
Orlando new position, Mauntel will be responsible
In this role, Joe Dear will be responsible for overseeing the Bank’s 57 business
for leading and growing the bank’s financial centers, specialty lending Nick Bassi Joins FrontWell Capital
Orlando Commercial Banking unit, groups including Dairy & Livestock and Partners as Vice President,
including Treasury Management. Agribusiness, sales support groups, Underwriting and Portfolio Management
and its wealth management division, Nick Bassi, an industry veteran with more
CitizensTrust. than two decades of asset-based lending
CapitalPlus Launches New Materials
experience in underwriting, origination
Financing Product
Crestmark, a division of MetaBank, and portfolio management, will be based
CapitalPlus Construction Services has
Names Rick Pierman as Crestmark in the firm’s Toronto headquarters.
launched a new Materials Financing
product to help contractors and Equipment Finance Senior Vice
subcontractors in all trades access President, Business Unit President Gordon Brothers Promotes Evren
mission-critical materials without tying Based in Troy, Rick Pierman will report Ozargun to Head of Credit
up their capital. CapitalPlus purchases to division president, Christopher Soupal. Gordon Brothers has promoted Evren
materials on the contractor’s behalf, In this new role, he is responsible for Ozargun to the newly established
the order ships directly to the job site, overseeing CEF’s equipment finance head of credit role. Ozargun and his
and contractors have extended terms to portfolio, succeeding Tom Rutherford, growing Credit team will work in close
repay CapitalPlus. who remains with the company in support partnership with Gordon Brothers’ deal
of division special projects. professionals and play an integral role in
structuring, underwriting and monitoring
CIT Names Business Development
Encina Business Credit Adds Garett all investments involving both debt and
Leaders for Northeast, West and
Figueroa to its Business Development equity transactions. Additionally, Ozargun
Southwest Regions
Team as a Managing Director will continue to oversee Corporate
CIT Group Inc. announced that its
Development activities.
Equipment Finance business, part of the Garett Figueroa is an asset-based
Business Capital division, has hired new lending finance professional with over
business development leaders for the nine years of business development and Gordon Brothers Welcomes Carolyn
Northeast, West and Southwest regions. credit risk experience at bank lenders D’Angelo as Managing Director, Brands
and non-bank private debt funds. In his & President of Laura Ashley
Wayne Wagner, Mark Johnson and JP
DeStefano join CIT as vice presidents for role, Figueroa will be responsible for Gordon Brothers, the global advisory,
business development on the Industrial expanding business development efforts restructuring and investment firm and
team, where they will be responsible in Wisconsin, Ohio, Missouri, Kansas, owner of the British heritage brand
for developing dealer relationships and Minnesota, while also joining forces Laura Ashley®, has welcomed Carolyn
throughout the Northeast, West and with Steve Beriau, an existing Encina D’Angelo as managing director, Brands
Southwest, respectively. business development executive, to cover and president of Laura Ashley.
4 the Chicago market.
THE
SECURED
CIT Names Business Development Haversine Funding Announces Andrew
LENDER
JUNE/JULY 2021 Officer in Commercial Services Fifth Third Bank Bolsters Asset-Based Bae Joins as Senior Director of
Lending Team Underwriting and Portfolio Management
CIT Group Inc. announced that it has
named Christopher DeRosa as a Fifth Third Bank, N.A. announced that Andrew Bae has 20 years of experience
business development officer in the Wanda Alverio and Andre Lemons have in the industry, will be responsible for
West Coast office of its Commercial joined the Fifth Third Business Capital underwriting, asset management, credit
policy and overall portfolio performance. services or focus on environmental division. Based in Los Angeles, he will
Previously, Bae focused on ABL conservation. Brian Lehman was named lead the bank’s Healthcare industry
origination with White Oak Commercial as the head of Green Economy. team and report to Adam Feit, managing
Finance. director and head of Financial Sponsors,
MidCap Business Credit, LLC Healthcare, and Life Sciences.
Hitachi Business Finance Expands to Announces the Addition of Terry
Upper Midwest, Hires Heather Rachel Dougherty and Jay Cunningham to its MUFG Appoints Neal Holland Chief
as Origination Leader Risk Team Financial Officer of MUFG Americas
Hitachi Business Finance has MidCap Business Credit, LLC is pleased Holdings Corporation and MUFG Union
announced that Heather Rachel has to announce the addition of Terence Bank, N.A.
joined its business development team, (Terry) Dougherty and James (Jay) Mitsubishi UFJ Financial Group
where she will focus her efforts on Cunningham to its risk team. Dougherty announced that Neal Holland has been
supporting business owners and trusted has joined MidCap Business Credit appointed chief financial officer for
advisors across the United States. as a SVP and head of Underwriting. MUFG Americas Holdings Corporation
Cunningham has joined MidCap and its primary banking subsidiary,
IDS Adds Four New Customer Wins in Business Credit as an SVP and head of MUFG Union Bank, N.A., effective June
Q1 2021 and on Record Pace for Go Credit and Diligence. 1, 2021.
Lives in First Half
IDS, a leading provider of enterprise Monroe Capital LLC Adds to Marketing Anne Mask Joins Sallyport Commercial
mission-critical solutions for secured Team by Hiring Jayro Yoo Finance, LLC
finance, announced it added four new Jayro Yoo has joined the firm as director Anne “Annie” Mask has joined Sallyport
customer wins during first quarter based in Texas. Jayro will serve on the Commercial Finance, LLC’s team
of 2021. They include two start- firm’s Marketing & Investor Relations as a partnership associate to help
up equipment finance operations: team. better serve its referral partners and
Metropolitan Capital, a universal bank assist prospects with sound finance
expanding into asset-based lending Moritt Hock & Hamroff (MHH) solutions. Mask is a tenured finance
(ABL); and a top five U.S. bank, which Launches Closely Held/Family professional who is passionate about
implemented IDS | ABL. The company Business Practice Group helping Sallyport’s entrepreneurs find
is also on record pace to complete 14 the right cashflow solutions to grow their
Moritt Hock & Hamroff (MHH)
go lives by the end of the first half, business.
announced that attorneys from its
representing a 40% increase over 2020.
Corporate/M&A, Estate Planning and
Employment Practice Groups have Sidley Adds Prominent Restructuring
Kristen Palmer Joins Iron Horse Credit joined forces to create its Closely-Held/ Partner Tom Califano in New York
as Business Development Officer Family Business Practice Group. The Sidley Austin LLP is pleased to announce
Iron Horse Credit, a leading stand-alone new practice group is comprised of six that Tom Califano is joining the firm’s
inventory lender, is proud to announce MHH attorneys, (Brian Adelman, Jill T. global Restructuring group. Califano
that it has hired Kristen Palmer as Braunstein, Keith J. Frank, Stephen J. will be a partner in the New York office
business development officer. In her Ginsberg, Louis P. Karol and Tina M. and joins from DLA Piper where he was
role, Palmer will be responsible for Kassangana). The group will combine the global co-chair and U.S. chair of the
identifying new territories, partnership their considerable experience and restructuring group.
channels and building new client collaborate to provide creative and
relationships. effective solutions to the broad array Siena Lending Group LLC Announces
of legal issues that family enterprises Addition of Joe Panico
JPMorgan Chase Commercial Banking encounter on a day-to-day basis and as
Joe Panico joins the Siena team as
Launches Specialized Green Economy they evolve over generations.
director of Originations, based in 5
Team Cleveland, where he will focus on THE
SECURED
JPMorgan Chase Commercial Banking MUFG Union Bank Appoints Head of providing asset-based lending (ABL) LENDER
announced the new Green Economy New Healthcare Commercial Banking solutions for middle-market companies JUNE/JULY 2021
specialized industry team, which will Team in Ohio, Michigan, Pennsylvania and
provide dedicated banking services and MUFG Union Bank announced that Western New York.
expertise to companies that produce Anvar Hodjaev has been named head of
environmentally-friendly goods and Healthcare for its Commercial Banking
DEPARTMENT
DEPARTMENT
NETWORK
INDUSTRY
NOTES
MOVES
Signature Bank Announces Management Services, was promoted
Management Appointments, to chief products officer, also a newly
Promotions and Transitions established position for the Bank.
After 21 years of dedicated service, Dawn Juliano was named to the newly
Mark Sigona, senior executive vice created position of senior vice president
president and chief operating officer, and deputy chief Lending officer,
announced his retirement, effective June reporting to executive vice president and
30, 2021. Sigona, a founding member chief lending officer Thomas Kasulka.
of the executive management team,
joined as senior vice president and chief Webster Expands Focus on Healthcare
financial officer. Financing
Eric R. Howell, senior executive vice Webster Bank is pleased to announce
president-Corporate and Business that it is increasing its commitment to its
Development since 2013, will assume Healthcare industry vertical by naming
the COO role, including his current Steve Dowe senior vice president, to
duties overseeing certain of the Bank’s lead Webster’s Middle Market Healthcare
national businesses and West Coast vertical focused on privately owned
operations. health care providers and senior housing
Peter Quinlan, executive vice operators.
president and treasurer, also announced
his retirement, effective June 30, 2021.
In this capacity, Quinlan managed the
Bank’s investment portfolio, interest rate
risk and liquidity management functions
since 2003.
Kevin Hickey, senior vice president
and chief risk officer for the past
five years, will return to the Treasury
Department as senior vice president-
chief investment officer and treasurer.
Keisha Hutchinson has been named
senior vice president and chief risk
officer, effective June 1, 2021, joining
Signature Bank from KPMG in Short
Hills, NJ, where she was audit partner
for five years.
Executive vice president and chief
financial officer Vito Susca will move
into the newly created post of EVP and
chief administrative officer, and assume
various operational responsibilities,
including overseeing risk and
compliance, facilities, security and
special projects as well as serving as a
liaison for internal audit and regulators.
6 Stephen Wyremski, senior vice
THE
SECURED president and controller since joining the
LENDER Bank in 2015, will be promoted to senior
JUNE/JULY 2021
vice president and chief financial officer,
managing all financial-related activities,
effective June 30, 2021.
Catherine Donald-Grove, senior
vice president and director of Product
The Secured Finance
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When faced with unprecedented
Networking, challenges, SFFound is there to help
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Education, Secured Finance Foundation helps unite our
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DEPARTMENT
INDUSTRY
DEALS
Lender/Participant Lender Amount Borrower Industry Structure Service
Type Provider
(Type)
Abacus Finance Group, Non-bank N/A To support the refinance of LifeSpan Pharmaceutical Senior debt financing Legal counsel
LLC Biosciences, Inc. (LSBio) by was provided
Thompson Street Capital Partners to Abacus by
Goulston &
Storrs, PC
Accel-KKR Credit Non-bank $67 Million Salary.com, Waltham, MA Technology Funding
Partners, Centre Lane, and Bank
and Wells Fargo Capital
Finance
Access Capital Non-bank $3 Million Next Move, Inc. a healthcare Healthcare Facility
staffing company that specializes staffing
in the placement of travel nurses at
assignments throughout the Midwest,
based in Kansas City, MO
AFC Gamma, Inc. Non-bank $21 Million FarmaceuticalRX, to provide capital Cannabis Credit facility
to allow FarmRX to purchase
and complete the build out of its
+/-120,000 square foot Class 1
cultivation and processing facility
Alleon Healthcare Capital Non-bank $25 Million Infusion pharmacy that specializes
in Infusion pharmacy services for
homecare patients, New Jersey
Amerisource Business Non-bank $12 Million Distributor of construction materials, Distribution: Senior credit facility
Capital California Construction
Amerisource Business Non-bank $4.5 Million Field services firm, Texas Field services Senior credit facility
Capital
Ameristate Bank in Bank and $10 Million Stabilis Solutions, Inc. a leading Energy Credit facility
conjunction with the Non-bank provider of energy transition services
U.S. Department of including hydrogen and liquified
Agriculture's (USDA) natural gas (LNG) fueling solutions
Business & Industry Loan
Program
Antares Non-bank N/A To support the acquisition of 80/20 Manufacturing Senior secured credit
Inc. by MPE Partners. 80/20 Inc. facilities
is the originator and manufacturer
of “The Industrial Erector Set,” a
modular aluminum T-slotted building
system for various applications and
end-markets
Assembled Brands Non-bank N/A InStyler, a high-tech hair and beauty Beauty Revolving line of credit
8 company, Culver City, CA
THE
SECURED Associated Bank Bank $12,255,100 VK Industrial V, LP, an affiliate of Real estate Term loan
LENDER Venture One Real Estate, for the
JUNE/JULY 2021
acquisition of a Chicago-area logistics
portfolio and billboard siteLender/Participant Lender Amount Borrower Industry Structure
Type
Ares Commercial Finance Non-bank $45 Million Southern States Cooperative, Agriculture Senior secured revolving line of
(ACF) Inc. (SSC), Richmond, VA, a retail credit
agricultural cooperative serving
the agronomy, energy and farm
supply needs of its members and
customers across eight states in the
Southeastern United States.
Atalaya Capital Non-bank $50 Million Opportunity Financial, LLC (OppFi), Fintech Corporate credit facility
Management a U.S.-based fintech platform that
powers banks to help the everyday
consumer gain access to credit
BofA Securities, Inc. and Bank $500 Million Phibro Animal Health Corporation, an Pet care Amended and restated credit
Coöperatieve Rabobank animal health and mineral nutrition agreement consisting of Term A
U.A., with Bank of company loans in an aggregate principal
America, N.A. acting as amount of $300 million and
Administrative Agent a revolving credit facility in an
aggregate principal amount of
$250 million.
BofA Securities, Inc., Bank $2.7 Billion General Mills, a leading global food Food Revolving credit facility. BofA
JPMorgan Chase Bank, company Securities, Inc. is acting as the
Barclays Bank PLC, Sustainability Coordinator.
Citibank, N.A, Deutsche
Bank Securities Inc., and
BNP Paribas
Bank of America Bank $150 Million Gibraltar Business Capital, an industry Lender finance Line of credit
leader in asset-based lending for lower
middle-market businesses
Bank of America, N.A. and Bank $300 Million Carpenter Technology Corporation, a Metals Syndicated credit facility
JPMorgan Chase Bank, recognized leader in high-performance
N.A specialty alloy-based materials and
process solution
BHI Bank $41.86 Million Oasis at Coral Reef, a new Real estate Construction financing
217,123-square-foot luxury senior
living facility under development in
Miami, adjacent to Jackson South
Medical Center
BMO Harris Bank N.A. Bank $200 Million Digi International Inc., a leading global Internet Amended and restated senior
provider of business and mission secured revolving credit facility
critical Internet of Things ("IoT") with an option to increase the
connectivity products, services and size of the facility by an additional
solutions $75 million. BMO Capital
Markets Corp. was joint lead
arranger and sole book runner;
9
THE
Silicon Valley Bank, as joint lead SECURED
LENDER
arranger and syndication agent,
JUNE/JULY 2021
and U.S. Bank and Citizens Bank
were lenders
Cadence Business Non-bank $20 Million NuBridge Commercial Lending LLC, Lender finance Senior secured revolving credit
Finance a small-balance commercial bridge facility
lender, Diamond Bar, CADEPARTMENT
INDUSTRY
DEALS
Lender/Participant Lender Amount Borrower Industry Structure
Type
CIBC Bank USA [Agent] Bank N/A Context Business Lending, LLC, a Lender finance Warehouse line
and Texas Capital Bank leading, national asset-based lender increase
[Joint Lead Arranger] focused on providing flexible working
capital for lower middle-market
businesses that do not qualify for
traditional bank financing
Cambridge Savings Bank Bank N/A Worcester Envelope Company, Paper and printing Expanded credit
(CSB) Auburn, MA facility
CapitalPlus Construction Non-bank $200,000 Self-performing commercial general Construction Construction factoring
Services contractor to take on large Housing facility
Authority projects, Texas
CapitalPlus Construction Non-bank $450,000 Painting and drywall contractor to Construction Construction factoring
Services take on several large contracts, South facility
Carolina
CapitalPlus Construction Non-bank $400,000 Existing steel fabrication and erection Steel Construction
Services contractor client Factoring Facility
CapitalPlus Construction Non-bank $5 Million Mechanical, electrical, and plumbing Construction Construction factoring
Services service contractor address accounts facility
payable and expand their payroll, Ohio
Car Capital Non-bank $20 Million Medalist Partners LP, a private Finance Credit line
institutional investment management
firm, New York
Celtic Capital Corporation Non-bank $4 Million Developer of software that automates Software Accounts receivable
the arrangement of property line of credit
management and renovation services
for REITs and property managers,
software
Chicago Atlantic Group, Non-bank $23.5 Million Vireo Health International Inc., the Cannabis First tranche of debt
an affiliate of Green Ivy leading physician-led, science- financing, non-
Capital, and a group of focused multi-state cannabis convertible with a
lenders company three-year term
CIT Group, Inc. Bank $20 Million GEE Group Inc., a provider of Staffing Asset-based senior
specialized staffing solutions and is secured revolving
the successor to employment offices credit facility
CIT Group Inc. Bank $39 Million To finance the Jefferson Health Real estate Loan
medical office building adjoining the
Philadelphia Navy Yard Corporate
Center
CIT Group Inc. Bank N/A Construction of a new Construction Financing
730,000-square-foot logistics center
and campus, North Las Vegas, NV
10
THE CIT Group Inc. Bank $15.9 Million Financing for two medical office Real estate Financing
SECURED buildings in Littleton, CO
LENDER
JUNE/JULY 2021 CIT Group Inc. - Bank $18.5 Million To finance the acquisition of the Healthcare Loan
Healthcare Finance unit Singing River Cancer Center in
Florence, AL
CIT Northbridge Credit Bank $23 Million Nova Compression, LLC (a successor Gas compression Credit facility
company to MGC Equipment
Company, LLC), Kilgore, TX)Lender/Participant Lender Amount Borrower Industry Structure Service
Type Provider
(Type)
CIBC Innovation Banking Bank $10 Million MayStreet Inc., an industry-leading Technology Credit facility
market data technology and content
provider, New York
Citizens Bank, N.A. Bank $65 Million Fluent, Inc., a leading data-driven Technology Consisting of a
[administrative agent, performance marketing company, $50.0 million
lead arranger and New York, NY term loan and a
bookrunner], BankUnited, revolving credit
N.A. and Silicon Valley facility of up to
Bank $15.0 million
Citizens Financial Group, Bank $300 Million Moda Midstream, a infrastructure Storage Senior credit facility
Inc. company that stores and handles
liquid products, Houston
Credit Suisse and Hudson Bank and $100 Million Fora Financial, a leading provider of Lender finance Revolving credit Sector
Cove Capital Management Non-bank flexible working capital to small- and facility Financial Inc.,
medium-sized businesses nationwide an affiliate of
Credit Suisse,
provided
access to the
debt facility,
which will give
the company
up to $150
million of
borrowing
capacity over
the next two
years.
Crescent Capital Group LP Non-bank N/A To support the refinancing of DMC Retail Unitranche facility
Group, a leading global platform of
needlecraft brands and a portfolio
company of Lion Capital
Crestmark’s Asset-Based Non-bank $3 Million Freight broker, Minnesota Transportation Ledgered line of
Lending and Factoring credit facility
Division
Crestmark’s Asset-Based Non-bank $300,000 Refrigerated trucking company, Trucking Accounts
Lending and Factoring Georgia receivable
Division purchase facility
Crestmark’s Asset-Based Non-bank $2 Million Backup power supply and distribution Power supply Ledgered line of
Lending and Factoring company, Oregon credit facility
Division
Crestmark’s Asset-Based Non-bank $4 Million CAD Transportation company, Alberta, Transportation Ledgered line of 11
Lending and Factoring Canada credit facility THE
Division SECURED
LENDER
Crestmark’s Asset-Based Non-bank $250,000 Freight-all-kinds trucking company, Freight Accounts JUNE/JULY 2021
Lending and Factoring California receivable
Division purchase facility
Crestmark’s Asset-Based Non-bank $1 Million Precision manufacturing company, Manufacturing Ledgered line of
Lending and Factoring Massachusetts credit facility
DivisionDEPARTMENT
INDUSTRY
DEALS
Lender/Participant Lender Amount Borrower Industry Structure
Type
Crestmark Equipment Non-bank $2,223,746 Wholesale food company, Midwestern Food New lease transaction
Finance U.S.
Crestmark Equipment Non-bank $1,955,811 Energy management company, Energy New lease transaction
Finance Midwestern U.S.
Crestmark Equipment Non-bank $697,993 Aesthetic clinic, Western U.S Healthcare New lease transaction
Finance
Crestmark Equipment Non-bank $2,665,599 Video telematics company, Western Video New lease transaction
Finance U.S.
Crestmark Vendor Finance Non-bank N/A Healthcare company, Midwestern U.S. Healthcare Equipment finance transaction
Crestmark Vendor Finance Non-bank N/A Transportation company, Midwestern Transportation Equipment finance transaction
U.S
CrowdOut Capital LLC Non-bank $20 Million Lane Gate Advisors, a boutique Finance
investment management practice
focused on certain segments of the
specialty finance market
Deutsche Bank AG Bank $100 Million Newtek Business Services Corp. Lending Credit facility
Eastward Capital Partners Non-bank $17 Million Augmedix, Inc., a leading provider of Medical New loan facility consisting of a
remote medical documentation and technology $15 million secured term loan
live clinical support and $2 million available in 4Q21
upon the achievement of certain
financial objectives
East-West Bank (EWB Bank $40 Million Drip Capital, a leading Fintech Fintech Committed credit facility
provider of cross-border trade finance
Encina Business Credit, Non-bank $10 Million Designer, marketer, and distributor of Bicycle Senior secured revolving credit
LLC mid-priced and premium bicycles facility
Encina Lender Finance, Non-bank $35 Million Uown Leasing, a technology-enabled, Technology Senior credit facility
LLC consumer leasing platform focused
on partnering with retailers of durable
consumer goods
Entrepreneur Growth Non-bank $1.8 Million Distributor of building materials, New Construction Financing
Capital Jersey
Express Trade Capital Non-bank $2.5 Million Organic spice importer in business Food Accounts receivables facility
since 2010, Nevada
Fifth Third Bank, N.A. Bank $22 Million American Shared Hospital Services Healthcare Credit agreement, composed
(NYSE American: AMS) (the technology of three loan facilities: a
"Company"), a leading provider $9.5 million term loan that
of turnkey technology solutions will refinance $6.8 million of
for stereotactic radiosurgery domestic Gamma Knife debt,
and advanced radiation therapy $1.6 million will primarily be used
equipment for two Gamma Knife reloads with
12 two customers that have recently
THE
SECURED extended their agreements, and
LENDER the remaining $1.1 million will
JUNE/JULY 2021
be available for future projects. A
second term loan of $5.5 million
will refinance the Company’s
PBRT Orlando equipment debt as
well as provide additional working
capital.Lender/Participant Lender Amount Borrower Industry Structure
Type
Fifth Third Business Non-bank $6 Million Cosmo Films, Inc., Addison, IL Specialty flexible Revolving credit
Capital packaging films facility
Flatbay Capital LLC Non-bank $5.6 Million Logging company with multiple Logging CRE Loan
locations in Arizona, secured by
an owner-occupied commercial/
industrial property with direct highway
and rail access
Gateway Trade Funding Non-bank $500,000 Maéstro Watch Co. a watch company Watches Purchase order facility
based in Canada
Gordon Brothers Non-bank N/A Nicole Miller, the eponymous fashion Retail Secured credit facility
and lifestyle brand founded and led by
Nicole Miller
ING [Sole Mandated Lead Bank $650 Million Supports Pilot Company's oil product Oil Inaugural syndicated
Arranger and Bookrunner] purchase and storage, energy and secured loan
with participant lenders wholesale marketing, logistics and
BNP Paribas, Rabobank, merchant activities
MUFG and Wells Fargo
Bank N.A.
Haversine Funding Non-bank $3 Million Infusion pharmacy going through a Pharmacy Participation in a
management buyout and needed medical receivables
capital to execute on the transaction asset-based loan
Haversine Funding Non-bank $150,000 Telecommunications infrastructure Telecommunications Factoring
services firm participation
Haversine Funding Non-bank $1 Million To support the growth of a staffing Staffing Subordinated debt
factor which experienced growth facility
recently due to various nurse staffing
and cleaning service clients in which
they specialize
Haversine Funding Non-bank $6.5 Million Sawmill, Southwest Real estate Senior secured
funding for a
commercial real
estate loan
J D Factors Non-bank $120,000 Transportation company, Illinois Transportation Factoring facility
J D Factors Non-bank $400,000 Transportation company, Iowa Transportation Factoring facility
J D Factors Non-bank $75,000 Transportation company, Virginia Transportation Factoring facility
J D Factors Non-bank $250,000 Transportation company, Illinois Transportation Factoring facility
J D Factors Non-bank $120,000 Transportation company, Wisconsin Transportation Factoring facility
J D Factors Non-bank $150,000 Transportation company, New Jersey Transportation Factoring facility
J D Factors Non-bank $150,000 Transportation company, Illinois Transportation Factoring facility
J D Factors Non-bank $150,000 Transportation company, Ontario Transportation Factoring facility 13
J D Factors Non-bank $100,000 Transportation company, California Transportation Factoring facility THE
SECURED
J D Factors Non-bank $500,000 Underground drilling company, Transportation Factoring facility LENDER
JUNE/JULY 2021
Arizona
J D Factors Non-bank $100,000 Transportation company, Ontario Transportation Factoring facility
J D Factors Non-bank $100,000 Transportation company, California Transportation Factoring facility
J D Factors Non-bank $75,000 Transportation company, Nova Scotia Transportation Factoring facilityDEPARTMENT
INDUSTRY
DEALS
Lender/Participant Lender Amount Borrower Industry Structure Service
Type Provider
(Type)
J D Factors Non-bank $200,000 Transportation company, New Jersey Transportation Factoring facility
J.P. Morgan, funds Bank and $265 Million NN, Inc., a diversified industrial Industrial J.P. Morgan acted as Bass, Berry
managed by Oaktree non-bank company, Charlotte, NC administrative agent, & Sims
Capital Management, sole bookrunner and PLC served
L.P., and investment sole lead arranger on as legal
funds managed by Morgan the asset-based credit counsel to
Stanley Tactical Value line, advised on the the Company
term loan, and served on the
as sole placement transaction.
agent on the preferred Gibson, Dunn
issuance. & Crutcher
LLP served as
legal counsel
to Morgan
Stanley
Tactical Value.
JPMorgan Chase Bank, N.A. Bank $800 Million Dillard’s, Inc. Retail Amended and
extended senior
secured revolving
credit facility. .
A $200 million
expansion option
remains in place.
KeyBanc Capital Markets Bank $50 Million Scout Clean Energy, a Colorado- Energy Letter of credit facility
as Coordinating Lead based renewable energy developer,
Arranger, along with owner, and operator
Rabobank and Wells Fargo,
each Joint Lead Arrangers
Kudu Investment Non-bank $300 Million Massachusetts Mutual Life Insurance Insurance Credit facility
Management, LLC Company (MassMutual)
Lighthouse Financial Corp. Non-bank $5 Million Importer and distributor of premium Seafood Credit facility
quality, responsibly-sourced crab
meat, Florida
LSQ Non-bank $3 Million Existing textile manufacturing client, Textiles Accounts receivable
Tennessee credit line
LSQ Non-bank $7.5 Million Resurging marketing services firm Marketing AR facility, including
services a $3.1 million payoff
to the first position
lender
LSQ Non-bank $1.5 Million Growing manufacturing company Manufacturing Facility
14 distributing DIY products to one of the
THE largest home improvement retailers in
SECURED the U.S., South Carolina
LENDER
JUNE/JULY 2021 Marco Capital Inc. Non-bank $600,000 Staffing company specializing in Staffing Factoring facility
providing global technology firms with
temporary personnel, New York
MidCap Business Credit Non-bank $8 Million Manufacturer of precision Aerospace and Asset-based credit
components and assemblies defense facilityLender/Participant Lender Amount Borrower Industry Structure Service
Type Provider
(Type)
Monroe Capital LLC Non-bank N/A To support the acquisition of Lulu’s
Express. In October 2018, Mammoth
partnered with Red Dog Equity LLC, an
Atlanta-based private equity firm
Monroe Capital LLC Non-bank $120 Million To support the recapitalization of an Specialty Senior credit
infusion therapy business by a private pharmacy facility
equity sponsor
NXT Capital Non-bank In support of Wind Point Partners’ Refrigeration and Senior credit
acquisition of Zone Mechanical, one HVAC facility
of the largest providers of commercial
and industrial refrigeration installation
and maintenance services
Old Hill Partners Non-bank $12 Million ByzFunder NY, a provider of working Lender finance Increase to
capital solutions in the form of committed
merchant cash advances, New York credit facility
Oxford Finance LLC Non-bank $125 Million Kala Pharmaceuticals, Inc., a Biopharmaceutical Senior secured
biopharmaceutical company focused term loan
on the discovery, development, and
commercialization of innovative
therapies for diseases of the eye
PNC Bank, National Bank $120 Million Universal Stainless & Alloy Products, Steel Amended
Association Inc., Bridgeville, PA and restated
that includes
a revolving
credit facility of
$105 million
and increases
the term loan
facility to $15
million
Rosenthal & Rosenthal, Non-bank $7.5 Million Food distributor serving restaurants Food distribution Revolving credit
Inc. up and down the East Coast, based in facility
the Midwest
Rosenthal & Rosenthal, Non-bank $2.75 Million Importer and distributor of Sporting goods Joint $2 million
Inc. recreational sporting products, factoring and
Georgia $750,000
inventory
production
finance deal
Runway Growth Capital LLC Non-bank $25 Million Allurion Technologies, a pioneering Technology Senior secured Armentum
leader in the development of term loan Partners 15
innovative, scalable and trusted served as THE
weight loss experiences the financial SECURED
LENDER
adviser to JUNE/JULY 2021
Allurion in
connection
with this
financing.DEPARTMENT
INDUSTRY
DEALS
Lender/Participant Lender Amount Borrower Industry Structure
Type
Sallyport Commercial Non-bank $500,000 To assist the turnaround of this Manufacturing Accounts receivable
Finance flourishing health food manufacturer facility
in Canada
Second Avenue Capital Non-bank $10 Million Northern Reflections Limited, one Apparel Senior secured credit
Partners, LLC of Canada’s largest privately-held facility
apparel retailers of women’s apparel
Second Avenue Capital Non-bank $30 Million UNTUCKit, one of the fastest-growing Retail Senior secured term
Partners, LLC retail apparel brands in North loan
America, New York, NY
SG Credit Partners Non-bank $1.25 Million Single-asset real estate holding Real estate Financing
company owned by a prominent
carwash company in the Midwest
SG Credit Partners Non-bank $1 Million Privately-held family investment N/A Loan structured
vehicle around the
Guarantors’ personal
assets and diversified
income streams
Siena Healthcare Finance Non-bank $35 Million Home health company, New York Healthcare Asset-based line of
credit
Silicon Valley Bank Bank $13 Million Zoom Telephonics, Inc., doing Telecommunications Credit facility
business as Minim, the creator of
innovative internet access products
Silicon Valley Bank Bank $50 Million Humacyte, Inc., a clinical-stage Biotechnology Secured debt
biotechnology platform company financing facility
developing universally implantable
bioengineered human tissue at
commercial scale
Sky Business Credit Non-bank $75,000 HVAC contractor, Arkansas HVAC A/R factoring line
Sky Business Credit Non-bank $100,000 Telecommunications contractor, Telecommunications A/R factoring line
Minnesota
Sky Business Credit Non-bank $200,000 Manufacturer, Illinois Manufacturing A/R factoring line
Sky Business Credit Non-bank $1.5 Million Healthcare staffing company, Staffing A/R factoring line
Pennsylvania
SLR Business Credit Non-bank $2.5 Million Producer of high-quality fresh and Food Asset based facility
frozen ground meat out of bankruptcy
via a 363 sale, Midwestern U.S.
SLR Business Credit Non-bank $12 Million Distributor of veterinary medicine and Veterinary medicine Asset-based
supplies revolving line of credit
SLR Healthcare ABL Non-bank $4 Million Medical staffing company Staffing Asset-based
revolving line of credit
16 SLR Healthcare ABL Non-bank $3 Million Skilled nursing operator Healthcare Asset-based
THE
SECURED revolving line of credit
LENDER
JUNE/JULY 2021 TAB Bank Bank $5 Million Factoring company, Michigan Factoring Rediscount credit
facility
TAB Bank Bank $3 Million Beverage company, Idaho Beverage Revolving credit
facilityLender/Participant Lender Amount Borrower Industry Structure
Type
TD Securities and Bank of Bank C$1.05 Navacord Corp., one of Canada’s largest Financing Financing. TD Securities is acting
America Billion insurance brokerage firms and fastest as administrative agent on the
growing multi-line brokers revolving credit facility and first lien
term loan and Bank of Montreal is
acting as administrative agent on
the second lien term loan.
Texas Capital Bank, N.A. Bank $20 Million Natural Gas Services Group, Inc., a Energy and Gas Senior secured revolving credit
leading provider of gas compression facility
equipment and services to the energy
industry, Midland, TX
TradeCap Partners Non-bank $2.5 Million Consumer packaged goods company, Packaged goods Purchase order finance facility
West Coast U.S.
Webster Bank Bank $34 Million In support of The Metro Group Inc.’s Water treatment, Senior secured credit facilities
acquisition of Response Electric HVAC mechanical increase
contracting, and
electrical services
Wells Fargo, N.A., including Bank $1.2 Billion TTEC Holdings, Inc. (NASDAQ: TTEC), one of Technology Amended credit facility by
Bank of America N.A., U.S. the largest, global CX (customer experience) exercising its accordion feature to
Bank N.A., PNC Bank, N.A., technology and services innovators for increase the total commitments
Bank of the West, and end-to-end digital CX solutions by $300 million to $1.2 billion.
Northern Trust, N.A.
White Oak ABL, LLC Non-bank $10 Million Hunt & Sons, Inc., a third-generation, Petroleum A second $10 million line increase
family-owned diversified petroleum and extension, bringing the total
products distributor, Sacramento, CA ABL credit facility to $95 million
White Oak Healthcare Non-bank N/A ViaQuest Holdings, Ltd. and affiliates, Behavioral Health Senior credit facility
Finance, LLC to support the acquisition by Council
Capital, a Nashville-based private
equity fund. ViaQuest is a provider of
services for individuals with intellectual
and development disabilities (“I/DD”),
hospice services, and other behavioral
health services to individuals.
Wingspire Capital LLC Non-bank $46 Million Worldwise, Inc., a leading designer and Pet Senior secured credit facility.
supplier of pet products Transaction includes a $30
million revolving line of credit
and a $16 million term loan
to replace the previous credit
facilities and enable Worldwise
to meet the growing demand for
cat and dog toys, beds, carriers
and other pet products as the
pet category continues to grow
both in the U.S. and worldwide.
17
THE
Wingspire Capital LLC Non-bank $45 Million Large private industrial mining company Mining $45 million senior secured credit SECURED
LENDER
facility which included a $35 JUNE/JULY 2021
million revolving line of credit
and a $10 million term loan
Wintrust Receivables Bank $4.75 Million Provider of logistics and transportation Transportation Line of credit
Finance management services
Wintrust Receivables Bank $4.5 Million Growing paper bag manufacturer Manufacturing Accounts receivable line of credit
FinanceFEATURE STORY Challenges and Opportunities Along the Road to Electric Vehicle Proliferation BY KEITH SPACAPAN Keith Spacapan of Hilco’s automotive practice provides an overview of the electric vehicle industry and tips for lenders lending in the space.
Takeaways
O
1
Ensure that a company’s strategic plan anticipates the
continued emergence of EV technology.
2
Assess the sense of urgency of a company’s leadership with
respect to EV technology.
3
Determine the percentage of a company’s R&D budget that
is related or dedicated to EV technology.
ver ten years ago, Nissan
4
Determine the percentage of a company’s capital expendi-
launched its all-electric tures that are related or dedicated to EV technology.
Leaf automobile, becoming
the first automaker to
5
mass produce such a Become as knowledgeable as possible about the details of
the strategic partnerships that a company has formed or is
vehicle. Since that time, considering in the future.
a plethora of legacy
manufacturers from Toyota KEITH SPACAPAN more cities became electrified for the first time and charging
and Honda to Mercedes, Audi Hilco Global became a less arduous task. As a result, auto pioneers,
and Ford, have introduced
notably Ferdinand Porsche, continued to experiment with
a host of hybrids and electric
electric and even early hybrid creations. Around this time in
vehicles (EVs). General Motors has announced that it is
the U.S., Thomas Edison was busy developing vehicle batteries
making a $27-billion investment in electric and autonomous
that could deliver better performance. He and Henry Ford
vehicles and has committed to introducing a minimum of 30 EV
even partnered together in an effort to develop a viable low-
models through 2025. Volvo recently revealed its aggressive
cost electrical car. Ultimately, however, many consider the
plans to transition to an all-EV company by the year 2030. And
introduction of Ford’s own $650 Model T in 1912 — a credit to
Volkswagen has put a stake in the ground, publicly stating that
the efficiencies of his innovative production-line process — as
its mission is to become the world’s largest manufacturer of
the pivotal event that stalled the future of electric vehicles of
electric vehicles. While multiple automakers plan to eliminate
the era and led to the meteoric rise of the combustion engine.
new vehicles with gasoline and diesel engines entirely in the
In fact, it wasn’t until over 80 years later, in 1996, that the first
next 15 years, it is worth noting that many longstanding brands
production electric vehicle was brought to market by General
have yet to fully commit to an EV platform-based future.
Motors. Toyota’s Prius hybrid was introduced the following
year, and in 2004 Tesla motors was founded.
Historical Perspective
The reluctance to commit is somewhat easier to understand
The Modern Era
when we consider the evolution of personal vehicles overall,
As referenced above, the past several years have featured
dating all the way back to the transition from horses to the first
numerous announcements by manufacturers across the
automobiles. With advances in technology in the 1800s came
globe pertaining to their plans for EV rollouts. Even under the
experimentation with not only gasoline, but steam and even
restrictions of COVID-19 conditions, since the start of 2021
electric-powered engines. Steam was, in many ways, the most
we have seen GM release its completely redesigned 2022
promising technology of the time because it was so widely used
Chevrolet Bolt EV and a compact sport utility variant badged
to power train locomotives, ocean-going ships, mining and
the Bolt EUV. Production is scheduled to begin later this fall on
factory equipment. An engine powered by steam is, in fact,
GMC Hummer’s highly anticipated EV. According to Stellantis,
widely believed to have propelled the world’s first “automobile”
by year end it plans to introduce up to ten hybrid or electric
in the late 1800s. Steam engines, however, had a number of
models across its brands, among them a highly anticipated
drawbacks, including the time needed to warm up prior to use
Jeep Wrangler plug-in. The latest front page news for electric
and their constant need for water, which limited the distance
vehicles is Ford’s introduction of an electric-powered version
they could travel in many circumstances.
of the iconic Ford F-150 pick-up truck to be badged the Ford
Electric cars of the time lacked many of the issues that 19
Lightning. Only five years ago, Ford used its iconic F-150 THE
plagued steam and gasoline-propelled vehicles. They didn’t pick-up to make headline news when it jettisoned the rugged, SECURED
make a lot of noise, they were comparatively simple to operate, LENDER
conventional steel body in favor of a lightweight, all-aluminum JUNE/JULY 2021
and they did not generate excessive heat or emissions. Some body. There is no better way for Ford to demonstrate its
popular electric models were actually produced as early as commitment to the cause than to introduce a zero-emission
the late 1880s in Germany and in England, where an entire variant of the most popular vehicle in America, the Ford F-150.
fleet of electric taxicabs filled the streets. The popularity of
The new car market in China is by far the largest in the
electric cars continued to grow, particularly in urban areas, asYou can also read
