The Shocking ABL, CRE & Growth Cap Deals: Brookfield $750M, Ribbon $385M, West Marine $150M

Good Morning Everyone

This week in Deals:

$2.28 billion in top 10 CRE deals
$1.67 billion in top 10 Growth Cap deals
$194 million in top 6 ABL deals
$2.22 billion in top 10 International deals

Top CRE Lenders
Morgan Stanley, Affinius Capital, Kennedy Wilson, TYKO Capital, IDB Bank, Värde Partners, Bravo Capital, Capital One, Bank of America, Bank Hapoalim

Top Growth Cap Lenders
HPS Investment Partners LLC, Cerberus Capital Management, ING Capital, Regions Bank, Synovus Bank, Texas Capital Bank, Hercules Capital Inc., TCW Asset Management Company LLC, Midcap Financial Trust, PayPal Ventures, BAG Ventures, Deciens Capital, Gradient Ventures, Velvet Sea Ventures, CIM, a large U.S. based insurance company, Keystone National Group, and Bridge Bank

Top ABL Lenders
Eclipse Business Capital, Capteris, Culain Capital, Flatbay Capital, and Crossroads Financial

Top International Lenders
Bank of America, NAB, NordLB, NIBC, EdRAM, LBPAM, LCL, the European Investment Bank (EIB), Stonebriar Commercial Finance, EvolutionX Debt Capital, Orion Infrastructure Capital (OIC), First Citizens Bank, CIBC Innovation Banking

Lender of the Week
Bank of America-Tarsadia Investments $125M CMBS Refi Loan, Celestica $1.5B Growth Cap Loan, Simple Asset Finance £120M Growth Cap Loan

Top 10 Global Loans: https://youtube.com/shorts/V87vSAu8vbE

🌆Top Weekly CRE Deals

• Morgan Stanley provides Brookfield with $750M refi for One Liberty Plaza in NYC Read

• Affinius Capital, Kennedy Wilson, and TYKO provide $300M for Gowanus project Read

• IDB Bank arranges $201.5M of financing for a national portfolio of skilled nursing facilities Read

• Värde Partners supplies $185M refi on a national self-storage portfolio Read

• Bravo Capital lends $169M on Jersey City apartments project Read

• MDH Partners expands loan from Capital One to $162M Read

• Affinius Capital, Kennedy Wilson originate $160M construction loan for multifamily development in Brooklyn Read

• Nashville mixed-use project receives $135M refi Read

• Bank of America provides $125M to refi Anaheim hotel Read

• Goldman Sachs makes $97M in construction financing for Harlem multifamily building Read

Key Transactions

• First Foundation Bank provided a $30.3 million refinancing for Urbanlux Fleur Premium apartments, a 136-unit luxury apartment complex in Hollywood. The three-year, fixed-rate loan structure balances stability for the borrower with limited long-term exposure for the lender, reflecting current market preferences for shorter durations on commercial real estate loans.

• Altamar Financial Group issued an $11.5 million acquisition loan for a 0.7-acre development site in Miami's Wynwood neighborhood. The one-year term indicates the lender's expectation of rapid development progress or refinancing shortly.

• Peachtree Group originated a $40 million retroactive C-PACE loan for the AC Hotel in San Diego. This 30-year amortizing loan includes unique features such as no payments for the first year, followed by five-year interest-only payments. This structure demonstrated the growing use of C-PACE financing for refinancing completed projects, offering borrowers long-term, flexible options in today's challenging credit environment.

Loan Structures
The market favored medium to long-term commitments, with tenors stretching from 3 to 30 years, reflecting a cautious optimism about the sector's future. For instance, the $750 million refinancing of One Liberty Plaza in Manhattan. This deal likely features a longer-term structure, possibly in the 7-10-year range, given its size and the prestige of the asset. Conversely, construction loans, such as the $300 million package for the Brooklyn multifamily project, typically stick to shorter, 2-3-year terms, allowing developers to transition to permanent financing upon completion.

Tips For Borrowers

1. Leverage your track record: In this market, experience counts. When approaching lenders, highlight your successful projects and strong performance history.

2. Consider mixed-use developments: The financing for projects like the Gowanus development in Brooklyn shows lenders' interest in diversified assets. If you're a developer, consider incorporating multiple uses in your projects to attract more favorable financing terms.

3. Be open to creative financing structures: With lenders offering a mix of fixed and floating rates and interest-only periods, be prepared to discuss and negotiate various loan structures that could optimize your project's cash flow and overall returns.

4.   Explore alternative financing structures like C-PACE loans, which can offer long-term amortization and flexible payment terms, particularly for refinancing recently completed projects.

5.   Be prepared to highlight strong occupancy rates and asset quality, as demonstrated by the Hollywood apartment refinancing, which had a 99% occupancy rate at the time of the loan.

6.   For large-scale projects, consider assembling a diverse lending consortium. The $300 million construction financing for a Gowanus, Brooklyn development involved multiple lenders, illustrating the potential need for creative capital stacks.

💡 Top Markets/Opportunities:

CRE Lenders Focus:
1) Expanding multifamily lending portfolio, especially in urban centers
2) Increase exposure to the industrial sector
3) Explore opportunities in the skilled nursing and healthcare real estate sector
4) Develop more flexible bridge loan products

CRE Developers Focus:
1) Mixed-income multifamily projects in urban areas
2) Repurpose or redevelop older office buildings
3) Senior living and healthcare sector

CRE Investors Focus:
1) Acquisition of self-storage portfolios
2) Invest in well-located hotels in strong markets
3) Explore opportunities in the industrial sector

CRE Brokers Focus:
1) Connect developers of large-scale multifamily projects with multiple capital sources
2) Specialize in arranging financing for skilled nursing and healthcare properties
3) Develop expertise in C-PACE financing

💸Top Weekly Growth Capital Deals

• Ribbon Communications Inc. announces closing of new $385M senior secured credit facility Read

• Zinc battery firm Eos agrees to a $315M facility with Cerberus Capital, retires existing senior loan Read

• ING to provide sustainability-linked revolving $250M credit facility for Lafayette Square Read

• Regions Bank leads $175M credit facility for Slide Insurance Read

• NeueHealth secures up to $150M in a new term loan facility with Hercules Capital Read

• Regis Corporation announces new $105M credit facility to refinance existing debt Read

• BondIt Media Capital closes $100M credit facility from Keystone National Group Read

• US start-up Gynger completes $20M Series A and lands $100M debt facility Read

• Horizon Technology Finance closes new $100M credit facility enhancing capital resources Read

• Bridge Bank closes $47M term loan to support Divergent Technologies’ growth Read

Top Weekly ABL Deals

• Eclipse Business Capital provides $150M credit facility to West Marine Read

• Capteris provides $30M lease line for a sponsor-owned national construction company Read

• Culain Capital announces $5M accounts receivable financing facility for a plastic injection molding service company Read

• Culain Capital announces $3M accounts receivable financing facility for a leading sustainable denim manufacturer Read

• Crossroads provides $2.5M inventory revolver for a manufacturer and distributor of plastic injection molded utensils Read

Key Transactions

• Ribbon Communications' $385 million facility is a masterclass in interest rate optimization. The initial SOFR plus 6.25% rate, adjusted based on leverage, isn't just about risk management—it's a sophisticated play on expected interest rate trajectories and company performance. This structure allows Ribbon to benefit from future rate decreases while incentivizing improved financial performance.

• Lafayette Square USA's hybrid credit facility is pioneering in integrating ESG metrics into pricing. The SOFR plus 2.70% margin, adjustable based on sustainability performance, isn't merely greenwashing. It's a harbinger of a new era where financial and societal performance are increasingly intertwined, potentially reshaping how we value companies and structure deals.

Loan Structures
We're seeing a trend towards longer-term financing structures in the current market, with many loans maturing in 5-6 years. For instance, the $385 million facility for Ribbon Communications matures in 2029. Loan-to-value ratios are generally conservative, reflecting lenders' caution in an uncertain economic environment. Covenants are increasingly incorporating ESG metrics, as evidenced by Lafayette Square USA's facility. The prevalence of hybrid structures, combining term loans with revolving credit facilities, suggests both sides desire flexibility.

Tips For Borrowers

• Leverage the current market's appetite for longer maturities to secure extended runways, but be prepared to offer lenders compensating benefits, such as equity kickers or performance-based pricing.

• Consider integrating ESG metrics into your financing structures. It's not just about lower rates - it's about aligning your financing with broader strategic and stakeholder objectives.

• For tech-adjacent sectors, explore venture debt options with specialized lenders like Hercules Capital. These lenders often offer more flexible terms and valuable sector insights.

• Don't overlook traditional ABL structures. Asset-based facilities can offer cost-effective liquidity in a high-interest-rate environment, especially for inventory-heavy businesses.

• Develop a narrative that goes beyond financials. Lenders are increasingly interested in your strategic vision and how it aligns with macro trends.

• Be proactive in liability management. As Regis demonstrated, timely refinancing can create significant strategic value beyond mere interest savings.

💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders Focus 
1) High-growth tech companies with strong cash flows
2) Sustainable energy companies, especially those in energy storage
3) Asset-rich traditional businesses looking to modernize
4) Companies with strong ESG credentials

Family Offices Focus
1) AI-driven fintech companies
2) Companies at the intersection of tech and traditional industries
3) Companies in the film and media financing sector

Private Equity Firms Focus
1) Companies with strong intellectual property in emerging tech fields
2) Companies with recurring revenue models in healthcare
3) Opportunities in the intersection of sports and real estate

Brokers Focus
1) Mid-sized companies looking to refinance and grow
2) Companies needing bridge financing for acquisitions
3) Opportunities with companies looking to monetize their real estate

Top International Deals

• BofA agents credit facility amendment, upsizes to $1.5B for Celestica Read

• EIB and CEPSA sign €285M loan to finance the construction of a second-generation biofuels plant Read

• ielo raises €208M financing deal to continue its growth trajectory Read

• Simply Asset Finance secures £120M loan facility from Bank of America Read

• Atome Financial secures $100M growth debt facility to expand in Southeast Asia Read

• Stonebriar Commercial Finance closes CAD$130M term loan for a leading provider of specialty industrial and environmental services Read

• Kennedy Wilson acquires multi-let industrial property in West London for $111M with $73M loan Read

• Sandfire Resources America announces variation to $40M bridge loan agreement Read

• Carbon Revolution secures $25M financing agreement with OIC to fund growth Read

• First Citizens Bank provides $22M for a new Euroseas containership Read

• Clariti receives $10M in financing from CIBC Innovation Banking Read
  

Loan Structures
An emerging trend from these transactions is the increasing convergence of traditional corporate lending with growth equity-style features. This hybrid approach, exemplified by Carbon Revolution's warrant-linked financing, allows companies to access debt capital while offering upside potential to lenders. As competition for quality deals intensifies, we may see more lenders willing to incorporate equity-like elements into their structures, particularly for high-growth sectors or companies approaching inflection points. Borrowers should be prepared to discuss these more nuanced financing options and understand their long-term implications on capital structure and stakeholder alignment.

Key Transactions

• Celestica's amended facility stands out for its comprehensive restructuring, extending maturities to 2029 and 2031 for different tranches while maintaining competitive pricing tied to SOFR. The new $750 million revolving facility and term loans provide Celestica with enhanced liquidity and financial flexibility to support its growth initiatives.

• Atome Financial's facility, backed by EvolutionX Debt Capital, showcases the appetite for fintech lending in Southeast Asia, with the potential to expand to $100 million through an accordion feature. This structure allows Atome to scale its credit portfolio and launch new products across multiple markets.

• Meanwhile, Carbon Revolution's agreement with Orion Infrastructure Capital for a $25 million release in tranches, tied to warrant issuances, illustrates how growth-stage companies in capital-intensive industries are securing funding while aligning investor interests with company performance.

Tips For Borrowers

• Consider longer-term facilities with staggered maturities to enhance stability and planning, as seen in Celestica's deal

• Explore accordion features to allow for future growth without immediate commitment, similar to Atome Financial's approach

• Leverage sector-specific expertise when selecting lenders

• Be open to creative structures that align with investor interests, such as Carbon Revolution's warrant-linked tranches

• Demonstrate clear use of proceeds and growth plans to attract the right lenders

New Lender Program

• UK lender Reparo Finance launches revolving credit facility to support SME growth Read

😲 Didn’t see that one coming

• Arby’s franchisee Miracle Restaurant Group files for Chapter 11 bankruptcy protection Read

• Texas Subway franchisee files for Chapter 11 bankruptcy Read

• The owner of Redbox files for Chapter 11 bankruptcy Read

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