content

Middle Market: 1Q14 updates to LCD’s Mezzanine Tracker now available

spcapThe middle market Mezzanine Tracker is now updated through the first quarter of 2014. In addition to U.S. mezzanine and unitranche investments, the spreadsheet includes non-syndicated second-liens for 2013 and later.

As before, the information is gleaned from market sources and SEC filings. The majority of deals are sponsored transactions.

Find the file on the web at lcdcomps.com > Research > US Data > Current Data > Mezzanine Tracker.

Subscribers can find a list of all second-lien loans, including syndicated tranches, in LCD’s separate Second Lien Pipeline and quarterly reports found within the Research > US Data tab.

Questions? Feedback? Let us know! Contact Kelly Thompson at kelly.thompson@spcapitaliq.com or at (312) 233-7054.

Find Kelly on Twitter @MMktDoyenne for middle-market financing news. Check out LCD on Twitter @lcdnews.

content

Middle-market PE firm Watermill hires John N. Carr from Lionheart

watermill-logo_opt

Middle-market deal maker John N. Carr has joined Watermill Group to evaluate new investments and support strategic initiatives for the private equity firm’s portfolio companies.

He joins from Philadelphia-based Lionheart Ventures, a private equity firm focusing on industrial companies. Carr has also worked at Goldman Sachs, Gomez Inc., J.P. Morgan, and Stroud Consulting.

Carr will be a principal at Lexington, Mass.-based Watermill, joining principals Michael Fuller and Julia Karol, as well as a team of six partners.

Watermill’s portfolio includes C&M Corporation, recycled-paper manufacturer FutureMark Paper Group, stainless-steel tubing maker Fine Tubes, Polaroid filmmaker MultiLayer Coating Technologies, component manufacturer Tenere, and Superior Tube Company. The firm targets companies generating annual revenue of $40-500 million, including distressed situations, challenged industries, complex transactions, and companies at turning points.

In February, Watermill invested in The Plastics Group, which manufactures blow-molded plastics, including large items such as bed frames and portable toilets, and plastic products with complex chemical properties such as the fuel tanks in lawn tractors and generators. Cole Taylor Bank and Medley Capital provided financing for the investment. – Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, distressed debt, private equity, and more

 

content

Comerica Bank to expand middle-market operations with nine hires

comerica logoComerica Bank added nine hires to expand its middle-market banking operations.

The additions will complement the bank’s other middle-market groups, which totaled 35 employees. The new team, based in Dallas, will focus on North Texas companies generating revenues of $20-500 million.

The head of the team, who has yet to be named, will report to David B. Terry, division manager, North Texas Middle Market Banking. The new team will comprise five middle-market bankers and three lending assistants.

At year-end 2013, more than 70% of Comerica Bank’s Business Bank loans were classified as middle market. – Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, distressed debt, private equity, and more

content

Pawn shop concern Borro nets $112M investment from Victory Park Capital

borrow logoMiddle market lender Victory Park Capital closed $112 million in financing for Borro, a collateral lender that offers loans within 24 hours secured against luxury cars and jewelry.

Chicago-based Victory Park Capital invests in niche credit and private-equity opportunities in the middle market, with a focus on distressed and improving companies. Investments have included Fort Lauderdale, Florida-based Silver Airways, independent oil-and-gas company Buccaneer Energy, small business lender Kabbage, smoothie maker Jamba Juice, and consumer lender Think Finance.

Personal asset lender Borro provides personal loans, bridge financing, and short-term loans to individuals who use watches, jewelry, loose diamonds, gold coins, luxury and classic cars, yachts, fine art, antiques and high-end handbags as collateral for loans. The average loan size is $12,000. Investors in Borro include Menlo Park-based Canaan Partners. – Abby Latour

content

Europe: Howard joins Santander in middle-market leveraged loan role

santanderNick Howard has started a new role as a senior manager at Santander, looking after new mid-market leveraged loan opportunities, as well as managing the bank’s existing positions.

Previously, Howard worked at Investec as a CLO portfolio manager. He has also held positions as a leveraged loan analyst at Sumitomo, and credit analyst at both Danske Bank and FCE Bank. – Sarah Husband

content

Middle market investor Medley Capital taps Feely as head of markets

medley logoMiddle market investor Medley Capital has hired Jim Feeley to join the firm’s investment team as a senior managing director and head of markets.

Feeley has worked in investment banking and leveraged finance for over 25 years, including at Fleet Bank, as well as with J.P. Morgan Securities’ global acquisition finance and financial sponsors group. He has worked at J.H. Whitney & Co., and was a founding partner of FriedbergMillstein’s credit strategies business and a founding managing partner of CastleHill Investment Management and White Squall Capital Partners.

New York-based Medley Capital provides first-lien, second-lien, and uni-tranche term loans to middle market companies with an investment size between $10-100 million for use as acquisition, buyout, and growth financing, debt restructuring, Chapter 11 exit financing, and DIP financing. – Abby Latour

content

Monroe Capital closes $500M mid market loan fund above target size

monroe capital logoMonroe Capital closed a $500 million leveraged loan fund today, above a $400 million target.

The fund will invest in senior debt transactions originated by Chicago-based Monroe Capital, including first- and second-lien term loans to sponsored and non-sponsored middle market companies across industries.

Over 30 institutional investors in the U.S. and Europe, including pension funds, insurance companies, endowments, foundations and wealth management firms, committed to the Monroe Capital Senior Secured Direct Loan Fund.

“The market was very receptive. We’ll probably look to do more,” said Monroe Capital CEO Ted Koenig.“We expect M&A to heat up this year, and are already seeing signs of it.”

Among recent transactions, Monroe Capital arranged a $17 million secured credit facility in December backing a merger of oil and gas industry survey company Landpoint, with West Company of Midland and King Surveyors. Monroe also last month funded a $50 million credit facility backing an acquisition of El Paso-based performance ignition system maker MSD Performance by Hot Rod Brands, an affiliate of private equity firm Z Capital Partners. – Abby Latour

content

S&P report: Midsize UK firms seek new funding sources

imagesMore information about the financial performance of U.K. midsize companies could help in the development of capital market funding for this sector, says Standard & Poor’s Ratings Services in a new report titled “Midsize U.K. Companies Seek New Funding Sources To Unlock Growth.

As the U.K. economy starts to recover, U.K. mid-market companies – which S&P defines as firms with revenue of between €100 million and €1.5 billion (between £85 million and £1.3 billion) – face a contraction in bank lending, potentially limiting their opportunity to grow and develop. While alternative sources of funding are available, potential investors are, in the agency’s view, being held back by a lack of transparency on mid-market companies.

S&P has analyzed an overall dataset of non-financial parent companies operating in the U.K., for which it found more than 30,000 listed and unlisted companies tracked by S&P Capital IQ.

“The results from this group show that, for the past seven years, profit margins are on average 1.7 times lower for U.K. mid-market companies compared with their larger peers, although they are less volatile,” said Standard & Poor’s research analyst Taron Wade. “Our study also found that U.K. midsize companies consistently maintain higher cash and short-term investments to total assets than their large and small peers, and maintain more conservative financial leverage ratios than large U.K. companies.”

In general, the sector-by-sector breakdown of U.K. mid-market companies mirrors the larger market, with the majority of firms operating in the consumer discretionary (ie., non-essential goods and services such as retail, media, and autos) and broad industrial sectors. Exposure to these sectors should help U.K. mid-market firms to benefit from the economic turnaround.

According to S&P’s economic research, the largest contribution to GDP growth on the output side of the economy in the third quarter of this year came from the services sector, which increased by 0.7% quarter-on-quarter. Consumer spending is likely to contribute the most to economic growth in the coming two years, and the agency estimates private demand will rise by 2.3% in 2014 and 2015, supported by improved confidence, rising employment, and an improving housing market – all of which should boost consumption and reduce the savings rate.

Mid-market companies in the U.K. are ten times greater in number than their larger peers in the country, and generated roughly a quarter of total sales for U.K. firms in 2012. However, while mid-market companies contribute a great deal to the local economy, they are more sensitive to the contraction of bank lending than their larger peers. And even though the U.K. private placement market is growing – with an estimated £6 billion raised in the past three years – in S&P’s view it lacks transparency in terms of transaction flow, and there are barriers to further development, including regulation. – Staff reports

The report is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com.

content

Czech Asset Management secures final close of global direct lending fund at $1.5B

czechCzech Asset Management has announced the final close for its second direct lending fund (SJC II) with total commitments of $1.5 billion, exceeding its $1 billion target and hitting its $1.5 billion hard-cap.

SJC II is the second direct lending fund that exceeds $1 billion raised by CAM within the past 34 months.

SJC II’s direct lending strategy focuses on providing privately negotiated, floating-rate senior secured loans to U.S. and European middle-market companies that generate annual revenue of roughly $75-500 million, and annual EBITDA of roughly $7.5-50 million.

To date, SJC II has invested approximately $300 million.

CAM’s global investor base is comprised of public and private pension funds, endowments, foundations, Taft-Hartley plans, family offices, and high-net worth individuals.

Old Greenwich, CT-based CAM is a direct lending firm engaged in the business of originating and investing in asset-based and cash-flow first- and second-lien secured floating rate loans for middle-market borrowers located throughout North America and Europe. CAM now has roughly $3 billion of committed capital under management, and $1.2 billion of co-investment capacity. – Sarah Husband

content

SunTrust boosting middle-market business with regional expansion

suntrust logoSunTrust Robinson Humphrey is expanding its middle market business by establishing new corporate banking offices in Chicago, Dallas, and San Francisco, the company announced this week. The move marks an initiative to enhance the investment bank’s presence into new regions and increase market share.

According to Mark Chancy, head of wholesale banking at SunTrust, this is not a lending-only strategy as the bank is in position to support companies with a full suite of banking services as they grow through their lifecycle. The new teams will target relationships with companies that have revenue ranging from $100 million to $5 billion with the ability to provide services ranging from traditional banking to investment banking and M&A advisory as needed.

Indeed, corporate and investment banking services offered will include debt and equity capital markets, treasury and payment solutions, financial risk management, foreign exchange, employee benefits solutions, and liquidity and investment products, according to the company.

While these operations will service clients across multiple sectors there will be some concentration in areas of strength given the location, such as energy in Texas and the southwest, technology on the West Coast, and the manufacturing and industrial groups in the Midwest. SunTrust’s existing presence in these regions include asset-based lending and equipment finance leasing teams in Texas and Chicago and capital markets and wealth management in California.

The bank will begin adding personnel to the new offices over the next 12-18 months and expects each office to have a staff of around 10-20. Team heads are already in place. The Dallas-based team is led by Clint Bryant, the former Southwest mid-corporate market manager at Fifth Third Bank, who is joined by Julia Harman, formerly of Fifth Third, and Don Besch, a SunTrust veteran. Ted Heldring will head up the midwest team and joins from J.P. Morgan where he was served as the head of debt capital markets for its Chicago office. Jim Deichen will take the reins of the San Francisco-based operation, having moved over from Bank of America as west coast head of technology corporate banking.

As Atlanta, Geo.-based SunTrust honed its initial expansion plan it focused on growth areas with a good number of mid-sized companies. The bank will look at other opportunities in 2014 and could add as many as six to eight additional offices over the next two years, Chancy says. – Jon Hemingway