The LBC Credit Partners III fund will “continue LBC’s strategy of originating, executing, and managing a diversified portfolio of direct loans and investments in U.S. middle-market companies across a broad range of industry sectors.”
LBC Credit Partners’ capital commitments total more than $1.75 billion. In 2010, LBC closed the LBC Credit Partners II, a $642 million fund. In 2006, the firm closed its first fund, totaling $300 million.
Since LBC closed its first fund in 2006, the market has changed. Besides fewer banks, there are more alternative lenders, such as business-development companies, with organized platforms to provide financing solutions to middle-market loans.
“The market is probably as liquid today as in 2007. There are fewer hedge funds today and more alternative lenders,” John Brignola, a managing partner at LBC, told LCD News.
“During the last cycle, CLOs had more baskets for middle-market loans. My sense is those baskets are not as great this time as they once were.”
The developments are positive for the market and for middle-market borrowers, Brignola said.
“Some of those players didn’t have the same type of permanency. Someone with longer-term capital is better aligned with middle-market borrowers.”
LBC Credit Partners provides senior loans, unitranche, second-lien, junior secured and mezzanine debt and equity co-investments for sponsored and non-sponsored transactions. The new fund will cover the same spectrum of loans across industries.
Among LBC Credit Partners’ recent deals, LBC announced this month it was administrative agent on a second-lien term loan to Florida-based Diversified Maintenance Systems for an acquisition and to refinance debt. Diversified Maintenance Systems, a portfolio company of middle-market investment firm Frontenac Company, is acquiring Rite Way Service.
In March, LBC Credit Partners said it was agent on an $80 million term loan backing the acquisition of Frontier Spinning Mills, a producer of cotton and blended yarns, by private equity firm American Securities. – Abby Latour