Last Week's Spiciest Deals: PG&E's $15B Grid Play, CommScope's $4.5B Apollo Dance, & Soleno's $200M FDA Flex

Good Morning Everyone

In a $20B+ deal week that redefined creative financing, three breakthrough strategies emerged that had credit veterans raising their eyebrows: PG&E's ingenious $15B DOE facility introduced "platform velocity arbitrage" (imagine faster-moving battery projects cross-collateralizing slower transmission buildouts), while Soleno Therapeutics' $200M Oxford Finance deal transformed FDA milestones from roadblocks into powerful financing catalysts, and the rise of "ecosystem value creation" in AI platform lending (led by CIBC and Horizon) proved that in today's interconnected markets, value grows exponentially with network effects - making traditional credit metrics feel as outdated as dial-up internet.

Inside this issue, all last week's top Growth Cap & ABL deals plus:
🚀 How "platform velocity arbitrage" unlocks value in multi-vector projects
⚡ How "asymmetric catalyst financing" turns regulations into capital opportunities
🌐 How ecosystem metrics are disrupting traditional underwriting models

Let’s dive in.

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I hope you find value in today’s newsletter if:
1) You want to know what active lenders in the CRE, Growth Cap, and ABL sectors are mainly financing
2) You want better insights/strategies to secure debt financing.
3) You are seeking active CRE, Growth Cap, and ABL lenders.

📊 By the Numbers

Top Growth Cap/ABL Lenders
Dept of Energy, Apollo, Monarch Alternative Capital, Blackstone, Oxford Finance, Siena Lending, Great Rock, Deutsche Bank, Brookfield Asset Mgmt, Clear Haven, Ares Commercial Finance, BHI, Bank Hapoalim, Leonid, Amerisource, Horizon, Eclipse, Trinity, Citibank, Pathward, Clarus, Wingspire, Austin Financial, Hedaya, and Sallyport.

Total financing volume: Exceeds $25 billion in disclosed deals.

Largest single deal: PG&E’s $15 billion conditional DOE loan guarantee for grid and energy infrastructure enhancements.

Number of states involved: At least 15 states, from California to Wisconsin to Florida.

Sectors financed: Technology, Energy & Utilities, Manufacturing & Industrial, Telecom, Consumer Goods & Retail, and Real Estate.

TERM LOANS
◾ PG&E ($15B): Scored a $15 billion DOE-backed term loan for grid upgrades, hydropower, and advanced battery storage in California.
◾ CommScope ($4.5B): Refinanced near-term maturities via a $4.15 billion term loan and notes from Apollo & Monarch, positioning for telecom growth.
◾ Dropbox ($2B): Secured a $2 billion term loan from Blackstone, bolstering general operations and share repurchases.

ABL/REVOLVING CREDIT
◾ SkyWater ($130M): Nabbed a $130 million senior facility from Siena and Great Rock, fueling domestic semiconductor expansion.
◾ Waste Mgmt ($135M): Locked in a $135 million ABL with Eclipse, refinancing debt and boosting working capital.
◾ DuckFund ($100M): Cinched a $100 million revolver from Clear Haven to fund short-term CRE and digital financing solutions.

WORKING CAPITAL
◾ Wisconsin Plugs & Tapes ($13M): Gained $13 million from Amerisource, paying off debt and expanding operations.

FACTORING / PO FINANCE
◾ Nutrition Start-Up ($500K + $100K PO): Hedaya funded $600K in factoring/PO for a healthcare food-delivery venture targeting chronic disease prevention.
◾ Disposal Firm ($500K + $100K PO): Sallyport’s $750K factoring aids a fast-growing waste services company chasing national expansion.

EQUIPMENT FINANCING
◾ Form Energy ($50M): Trinity supplied $50 million for Form Energy’s iron-air battery systems, fueling major manufacturing pushes.
◾ Specialty Manufacturer ($12M): Clarus provided $12 million to modernize a PE-backed production line, boosting efficiency and output.

RESERVE-BASED LENDING
◾ Priarie ($44M): Prairie’s RBL from Citi starts at $44 million, expandable to $1 billion, fueling oil-and-gas growth.

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🏆 Winners
◾ Technology-Enhanced Manufacturing: Applied Digital's successful $150 million financing demonstrates a strong lender appetite for AI and HPC infrastructure projects.
◾ Clean Energy Innovators: Form Energy's $50M equipment financing shows robust support for breakthrough energy storage technology
◾ Alternative Lenders: Oxford Finance's $200M commitment to Soleno Therapeutics with favorable 48-month interest-only terms proves their growing market dominance

❌ Losers
◾ Traditional Manufacturers: Companies lacking modernization strategies face higher rates and shorter terms
◾ Regional Service Providers: Smaller service companies without technological differentiation see challenging terms
◾ Traditional Banks: Conventional lenders without specialized tech platforms lose market share to alternative lenders

📝 Tips For Borrowers

◾ Instead of seeking a single large facility, structure your financing needs in distinct tranches with different triggers and terms. Lenders are more comfortable with more significant total commitments when they are structured in discrete, milestone-linked components.
◾ Negotiate automatic margin step-downs tied not just to leverage ratios but to specific business achievements like new market entry or technology deployment milestones.
◾ Create "predictive value frameworks." Instead of just showing historical performance, develop models showing how different business initiatives create multiple layers of credit enhancement. For example, demonstrate how customer acquisition strategies drive growth and create predictable cash flow patterns that reduce risk.
◾ Organize "innovation showcases" where lenders can see new products or technologies in development or "customer experience days" where they can directly understand your market position. The goal is to make lenders experts in your business model, not just your financials.

💡 Financing & Referral Opportunities

Locations: San Francisco, Los Angeles, Orlando, Houston, New York, Salt Lake City, Hickory (NC), and Somerville (MA)

Broker Opportunities
◾ Turnaround consultants, industry-specific consultants, and equipment appraisers for roll-up opportunities in fragmented industries
◾ Healthcare consultants, medical billing companies, and private practice groups for healthcare tech integration plays
◾ Technology consultants, digital transformation advisors, and PE operating partners for AI-enhanced business services

Family Office Opportunities:
◾ Companies focused on preventative care and wellness as these companies sit at the intersection of healthcare, food tech, and wellness. Insurance companies are increasingly willing to pay for preventative care, creating recurring revenue streams that growth capital lenders love (Ex. Kaiser Permanente Ventures-backed Omada Health)
◾ AI-enabled security technology platforms as they combine physical security with AI monitoring - that's where the market's heading. Recurring revenue from monitoring services plus hardware assets attracts lender interest (Ex. Knightscope)

Lender Financing Opportunities
◾ High-growth tech companies with strong IP (Ex. Gong.io), manufacturing modernization plays (Ex. CNH Industrial-cnh.com, renewable energy projects (Ex. Clearway Energy Group-clearwayenergygroup.com/), consumer brands with strong retail presence (Ex. Peter Millar golf apparel-petermillar.com/), B2B payments platforms (Ex. Bill.com), semiconductor and critical technology (Ex. GlobalFoundries-gf.com/).

The Platform Velocity Arbitrage
PG&E's $15B DOE loan guarantee facility showcases "platform velocity arbitrage," combining multiple growth vectors (hydropower, battery storage, transmission, and virtual power plants) under a unified framework. The structure enables faster-moving projects to subsidize slower ones through shared credit enhancement, incorporating community benefits.
Mid-market companies can use platform financing that matches growth speeds by dividing loans into distinct "tranches." Each tranche aligns with specific needs - from funding quick operational improvements like equipment upgrades to supporting longer-term initiatives like market expansion.
Smaller companies can utilize "micro-platform optimization" through layered financing that works as an integrated system - supporting daily operations, capturing growth opportunities, and funding strategic investments while measuring how components work together.
Lenders can develop "platform velocity" loan models that automatically adjust terms based on how different parts of the borrower's business platform perform, creating financing structures that optimize over time.

The Asymmetric Catalyst
Soleno Therapeutics' $200M Oxford Finance facility exemplifies "asymmetric catalyst financing" through strategic structuring: $50M initial, $100M in FDA-linked tranches, and $50M by mutual consent. The innovation lies in converting regulatory milestones into financing catalysts, offering a flexible 48-month interest-only period that adapts to development timelines.
Mid-market companies can use "milestone-linked financing," where loans are tied to business achievements. For example, a $100M revenue company might arrange a $30M loan that offers better terms when it reaches key milestones, such as entering new markets, winning customers, or upgrading technology.
Smaller firms can use financing that grows with success through "micro-catalyst" arrangements. A $10M company might start with a $2M loan and gain access to more funding when they hit specific targets, like customer growth or performance metrics.
Lenders can create standardized "catalyst-based" systems to measure business achievements across industries. These systems automatically adjust loan terms when companies reach milestones.

The Ecosystem Arbitrage
Recent financing deals by CIBC and Horizon (a $10M venture loan) demonstrate a shift in valuing AI platforms through "ecosystem value creation," recognizing both direct revenue and the broader ecosystem effects of AI automation. The deals innovatively structure financing to grow with network effects, acknowledging that value creation accelerates non-linearly as ecosystems expand. This shows lenders' increasing sophistication in understanding and financing platform economics.
Mid-market companies can use "ecosystem-based financing" that grows with their network strength. For example, a $75M software company could secure a $15M loan that offers more borrowing power as it hits key network metrics—like increasing API connections and growing its partner network—beyond revenue growth.
Smaller companies can focus on "micro-ecosystem" financing by starting with core network foundations. For example, a $5M software company might begin with a $1M loan based on basic performance. The company would have opportunities to increase funding as it achieves network goals, such as adding partner integrations or improving AI capabilities, which are measured by clear metrics.
Lenders can create standardized "ecosystem value" systems that measure how companies build valuable networks. These systems should include frameworks for different platforms (marketplace, SaaS, AI) and ways to assess network stability and growth.

Want to dive deeper into how to implement these strategies? Email me at [email protected]

🏦 New Loan Programs
◾ CATL provides innovative financing solutions to its suppliers. Read
◾ Levenue and Newfound Global team up to enhance financing options for small and medium-sized enterprises. Read

😲 Didn’t see that one coming

◾ JPMorgan Chase, Bank of America, and Wells Fargo face an $870M lawsuit for Zelle scam losses. Read
◾ An investor receives a 5-year sentence for a $55M Freddie Mac fraud scheme. Read
◾ A Chicago developer is sentenced to almost 13 years for embezzling millions from a failed bank. Read
◾ Party City shuts down over 700 stores nationwide, ending nearly four decades of operation. Read
◾ REBNY files a lawsuit to overturn NYC's ban on broker fees. Read
◾ Segantii founder Simon Sadler pleads not guilty to insider dealing charges in Hong Kong. Read
◾ Former Chief Adviser to Mayor Adams is charged with accepting bribes from a real estate investor. Read

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