Last Week's Shocking Growth Cap Deals: The Hilb Group $2 Billion, Willis Lease Finance Corp $1 Billion, Agrovision Corp $400 Million

Good Morning Everyone

Last week, record financing volume was dominated by mega-deals across sectors, with insurance brokerage and medical technology leading the charge. Despite macro headwinds, a sustained appetite for large credit facilities signals strong institutional confidence. Multi-billion dollar facilities continue to drive market activity, with The Hilb Group's $2B financing round highlighting a strong appetite for consolidation in the insurance sector. Strategic refinancing dominates deal flow as companies position for 2025 growth initiatives. Let’s dive in.

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📊 By the Numbers

Top Growth Cap/ABL Lenders
Bank of America, Rabobank, Banco Santander, Goldman Sachs, Barclays, Scotiabank, BBVA, BanBif, Banco ITAU, BTG Pactual, COFIDE, ICBC, J.P. Morgan, Mizuho Bank Ltd., Waterfall Asset Management, Oxford Finance, K2 HealthVentures, USCIS under the EB-5 Program, Tether, Legacy Corporate Lending, Wingspire Equipment Finance, Chicago Atlantic, Avenue Venture Opportunities Fund, Republic Business Credit, Change Capital, Horizon, Oxford Commercial Finance, CapitalPlus Financial Services, and The Hedaya Capital Group

Largest single deal: The Hilb Group secures $2 billion financing round

Number of states involved: 30

Sectors financed: Insurance Brokerage, Cannabis, Agriculture, Manufacturing, Aviation, Mining, Medical Technology, FinTech, Biotechnology, Construction, Apparel Manufacturing, Staffing, Cryptocurrency

Refinancing and Credit Facilities: The Hilb Group secured a $2 billion financing round from undisclosed lenders. Willis Lease Finance Corporation obtained a $1 billion five-year revolving credit facility from Bank of America.

Debt Warehouse Facility: Sunbit secured a $355 million debt warehouse facility led by J.P. Morgan, Mizuho Bank Ltd., and Waterfall Asset Management.

Asset-Based Loans (ABL): Spray Products Corporation obtained a $40 million asset-based loan from Legacy Corporate Lending. Republic Business Credit extended a $15 million asset-based loan and partnered with Change Capital for an additional $2 million junior debt facility.

Factoring Facilities: CapitalPlus Financial Services extended a $1 million factoring facility to an underground utility contractor.

Equipment Financing: Wingspire Equipment Finance announced a $35 million equipment financing deal with a sponsor-backed medical technology company.

Venture Loan Facility: Horizon Technology Finance provided Ursa Space Systems with a $10 million venture loan facility.

Credit Facility: Ocugen entered a new $30 million credit facility with Avenue Venture Opportunities Fund, L.P.

Trade Finance: Tether's investment division financed a $45 million crude oil transaction between a major oil company and a commodity trader.

EB-5 Program Loan: US Strategic Metals received expedited approval for a $100.8 million loan application under the EB-5 program.

TAKEAWAY: Traditional lenders are aggressively backing businesses that serve as infrastructure players in their sectors (like Hilb in insurance and Deep Roots in cannabis) rather than just pure technology plays.

Last Week’s Analysis
STRENGTHS 👍️
◾ Strategic Technology Integration Lenders successfully combine traditional financing with tech platforms (E.g., Sunbit embedding in 50% of auto dealerships, integrating with Stripe for enhanced distribution)

OPPORTUNITIES 🤝
◾ Cross-Border Innovation Potential Growing opportunity for international financing solutions (E.g., Tether's $45M oil transaction showing new cross-border possibilities)

🏆 Winners
◾ Tech-enabled traditional businesses are emerging as clear winners in the current financing landscape
◾ Well-established manufacturing businesses, particularly those serving critical supply chains like battery materials are also seeing favorable terms
◾ Specialized sector lenders, particularly those focused on healthcare and technology, are seeing strong deal flow

❌ Losers
◾ Traditional "analog" businesses without a clear technology strategy are facing an uphill battle
◾ Pure-play service businesses without recurring revenue models or significant intellectual property assets may face headwinds
◾ Traditional bank lenders without specialized industry expertise may struggle to compete with sector-focused lenders

📝 Tips For Borrowers

1. Consider hybrid structures combining term loans with revolving facilities. This approach provides both immediate capital and ongoing flexibility while potentially improving overall cost of capital through relationship pricing.

2. Negotiate for extended interest-only periods in growth capital facilities but be prepared to accept staged availability and clear performance metrics as trade-offs for this flexibility

3. Focus on forward-looking KPIs and consider refinancing 12-18 months before maturity in the current market

4. Develop clear ESG metrics and reporting capabilities early, as sustainable finance considerations are increasingly influencing both the availability and pricing of growth capital facilities.

💡 Financing & Referral Opportunities for Brokers & Lenders

Location: San Francisco, Los Angeles, Las Vegas, Dallas, Virginia, Missouri, Florida

Broker Opportunities
◾ Environmental consulting firms
◾ Companies providing loan monitoring software
◾ Specialized (tech) staffing firms

Lender Financing Opportunities
◾ Businesses that have successfully integrated AI and robotics into their operations
◾ Companies focusing on critical supply chain components, especially in the battery and renewable energy space
◾ Insurance and financial services companies with strong M&A strategies

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MARKET ANALYSIS

📈 Interest Rate Outlook
The leveraged finance market is adapting to post-LIBOR dynamics, highlighted by Willis Lease Finance's $1 billion Term SOFR-priced facility. Spreads have normalized, with BB-rated issuers seeing 25-50 basis point compression from summer peaks. The rise in delayed-draw features, seen in Orthofix's $275 million and Agrovision's $400 million facilities, shows evolving capital deployment strategies. "The market is clearly rewarding thoughtful draw schedules," notes a senior syndicate head, with pricing increasingly tied to leverage and rate thresholds.

🦾 Addressing Challenges
Portfolio strain is intensifying across growth capital markets, especially in tech and consumer sectors, with heightened scrutiny on revenue metrics. Chicago Atlantic's $30 million Deep Roots facility demonstrates selective sector appetite and stricter covenant monitoring. Shorter commitment periods, exemplified by Sunbit's $355 million warehouse facility, signal shifting risk appetite. "We're seeing a flight to quality in structure," notes a direct lender, as companies face inflationary pressures and increased covenant modification requests.

⚖️ Regulatory Watch
A regulatory shift in specialty finance is evident with US Strategic Metals' expedited $100.8 million EB-5 facility approval, signaling support for national security-aligned projects, especially in critical minerals sectors. The structured finance market is adapting to new SEC disclosure requirements, with legal focus turning to beneficial ownership reporting under the Corporate Transparency Act, particularly affecting multi-tranche facilities.

💫 Emerging Trend: Data-Driven Underwriting 
ESG-linked facilities have become market standard, with volumes reaching $12.3 billion, up 45% year-over-year. Agrovision's $400 million facility with sustainability targets and Willis Lease's fleet modernization metrics demonstrate adoption beyond traditional green sectors. Mid-market deals show growing appetite, with 5-10 basis point pricing adjustments for meeting targets. "The standardization of KPIs has been crucial," notes a European bank's sustainable finance head, "enabling broader market adoption."

🔮 Future Outlook
Growth capital markets show strong momentum into 2025, highlighted by Hilb Group's $2 billion refinancing and increasing hybrid facilities in tech sectors. While Q1 pipeline remains robust, economic uncertainties drive conservative structuring. "The bifurcation between large-cap and middle-market terms remains pronounced," notes a leveraged finance head, with larger deals trending covenant-lite while middle-market maintains traditional protections.

New Loan Programs
◾ Jiffy Junk Has Introduced a Financing Program Read

😲 Didn’t see that one coming

◾ Jamison defaults on debt tied to L.A.’s Equitable Plaza with $85M loan Read
◾ TGI Fridays files voluntary Chapter 11 Read
◾ Vitamin Shoppe Parent Company Franchise Group enters Chapter 11 and plans to close American Freight Read
◾ Film Finances unveils company sale in prepackaged Chapter 11 Read

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