Wildest Growth Cap & ABL Deals from Last Week: Peabody Energy $2.5 Billion, Regal Cinemas $1.9 Billion, Minerals Technologies $575 Million

Good Morning Everyone

In a week marked by exceptional deal volume and complexity, total financing commitments soared into the multi-billion-dollar range, with Peabody's $2.1B bridge loan leading the pack amid evolving ESG scrutiny, followed by Regal Cinemas' $1.9B post-bankruptcy refinancing. Yet it's the innovative structures that caught my attention - Applied Digital's HPC financing featured a clever 0.25% rate paired with a 1.35x return hurdle, signaling how lenders are reimagining risk pricing in AI infrastructure, while Central States Water Resources' $325M Brookfield deal and Gateway Fiber's $75M raise highlight growing lender comfort with "tech-enabled infrastructure" plays. This emerging trend of blending traditional asset backing with next-gen technology potential is reshaping middle-market lending dynamics.

Inside this issue, all last week's top Growth Cap & ABL deals plus:
🎭 How banks are doing environmental gymnastics to keep coal deals flowing
🌊 How disaster cleanup is becoming Wall Street's newest asset class
💧 Brookfield's brilliant move to monetize municipal inefficiencies

Let’s dive in.

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📊 By the Numbers

Top Growth Cap/ABL Lenders
Deutsche Bank, Barclays, JP Morgan, Wells Fargo, Goldman Sachs, Texas Capital, Brookfield Infrastructure Debt, Third Coast Bank, CIBC, Comvest Credit Partners, HSBC UK, CIBC, Haversine Funding, Trinity Capital, Macquarie Equipment Capital, eCapital, Great Rock Capital, LSQ, Siena Lending Group, Amerisource Business Capital, Republic Business Credit, Sallyport Commercial Finance, Celtic Capital Corporation

Largest single deal: Peabody’s $2.1B bridge loan ( A hallmark ESG tension point financed by KKR, Jefferies, and Deutsche Bank, spotlighting met vs. thermal coal distinctions).

Number of states involved: 12

Sectors financed: Coal mining, cinema exhibition, specialty minerals, HPC/data infrastructure, broadband, SaaS/fintech, water utilities, cannabis operations, aerospace components, digital printing, and industrial automation.

Bridge Loans:
◾ Peabody ($2.1B): Secured a short-term bridge loan from KKR, Jefferies, and Deutsche Bank to acquire coal assets, spotlighting ESG tensions between met and thermal coal.

Exit Financing:
◾ Regal Cinemas ($1.9B): Closed exit financing led by major banks, extending maturities after restructuring and leveraging a Thanksgiving box office boost despite pre-pandemic shortfalls.

Term Loan B + Revolving Credit Facilities:
◾ Minerals Technologies ($975M): Obtained a seven-year Term Loan B and expanded Revolver, enhancing liquidity and extending tenor for stable industrial markets.
◾ Gateway Fiber ($75M incremental): Increased its revolving facility led by Texas Capital, fueling fiber-to-the-home expansion across multiple states.

Senior Secured Loans:
◾ Applied Digital ($150M): Closed a senior secured HPC financing with Macquarie, offering ultra-low interest to advance AI-ready data centers.
◾ CSWR ($325M): Gained a senior secured infrastructure debt facility from Brookfield, upgrading water/wastewater systems in underserved areas.
◾ Steno ($20M): Received a senior secured growth capital term loan from Trinity Capital, modernizing court reporting and legal-tech services.
◾ Seatex ($85M): Locked in a senior secured credit facility from Comvest, supporting growth in specialty chemical manufacturing.
◾ Digital Printing Firm ($35M): Landed a senior secured ABL facility from eCapital, easing covenants and boosting large-format printing capabilities.

Growth Capital Facilities:
◾ CoachHub ($40M): Secured a growth capital facility from HSBC Innovation Banking UK, scaling a global digital coaching platform.
◾ Aerospike ($30M): Raised a growth capital loan from CIBC Innovation Banking, powering real-time database enhancements for AI/ML apps.

Accounts Receivable and Factoring Facilities:
◾ NY-Based Staffing ($30M): Obtained a senior secured AR revolver from LSQ, ensuring payroll liquidity amid rising staffing demand.
◾ Belluscura ($4M): Drew on AR and cash flow financing from Sallyport, scaling oxygen device production.
◾ E-Commerce Manufacturer ($4M): Arranged a recourse factoring facility with Republic Business Credit, accelerating working capital for online fulfillment growth.

This smart home company grew 200% month-over-month…

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This year alone, RYSE has seen revenue grow by 200% month-over-month and expanded into 127 Best Buy locations, with international markets on the horizon. Plus, with partnerships with major retailers like Home Depot and Lowe’s already in the works, they’re just getting started.

Now is your chance to invest in the company disrupting home automation—before they hit their next phase of explosive growth. But don’t wait; this opportunity won’t last long.

Invest today before their share price changes next week.

🏆 Winners
◾ Digital Infrastructure Companies: Applied Digital's successful $150 million financing demonstrates strong lender appetite for AI and HPC infrastructure projects.
◾ Entertainment Venues: Regal Cinemas' substantial refinancing shows lender confidence in the recovery of physical entertainment spaces.
◾ Private Credit Funds: Multiple large-ticket transactions demonstrate the growing role of private credit in complex financings
◾ Equipment Finance Providers: Macquarie's $150 million deal with Applied Digital showcases the opportunities in specialized equipment financing for high-growth sectors

❌ Losers
◾ Traditional Coal Operations: While Peabody secured significant funding, the focus on metallurgical coal suggests challenges for pure-play thermal coal operators.
◾ Small Regional Theater Chains: The contrast between Regal's significant refinancing and smaller operators' access to capital highlights scale advantages.
◾ Pure-Play Working Capital Lenders: The trend toward comprehensive financing solutions may challenge single-product lenders.

Last Week’s Analysis

OPPORTUNITIES 🤝
◾ Tech-Enabled Lending Innovation Growing market for financing AI and compute infrastructure
◾ Infrastructure Modernization Wave: Significant financing opportunity in upgrading aging infrastructure

📝 Tips For Borrowers

◾ Pursue both traditional and alternative financing sources simultaneously - the competition often leads to better terms, as shown by Applied Digital's borrower-friendly terms in the data center sector.
◾ Address ESG challenges proactively in financing discussions. Lenders are increasingly sophisticated in evaluating transition stories backed by operational changes.
◾ High-growth companies should align availability with growth metrics instead of traditional asset coverage to secure higher advance rates and flexible covenants.
◾ Position financing needs within a consolidation narrative in fragmented industries to secure larger facilities and flexible terms.
◾ With rate cuts expected in 2025 but volatile credit spreads, prioritize structural flexibility over absolute cost.
◾ Maintain active dialogues with 3-4x more lenders than needed, focusing on sector specialists.

💡 Financing & Referral Opportunities for Brokers & Lenders

Locations: St Louis, Knoxville, New York, Denver, Dallas, Mountain View, Cleveland

Broker Opportunities
◾ Engineering firms focused on power infrastructure
◾ Environmental compliance consultants
◾ Healthcare IT consultants

Lender Financing Opportunities
◾ Remember the old saying about selling pickaxes during a gold rush? That's exactly what's happening in AI infrastructure right now (E.g. Switch Inc)
◾ Companies that make healthcare infrastructure work (E.g. Invacare Corporation)
◾ Manufacturers upgrading their facilities for efficiency and sustainability (E.g. Stepan Company - similar specialty chemicals business with strong market positions and modernization potential)

MARKET ANALYSIS

🔄 The Met-Thermal Coal Paradox: Banking's Cognitive Dissonance
Banks are orchestrating a semantic sleight of hand in coal financing through financial gymnastics. The Peabody Energy deal, backed by Deutsche Bank, exemplifies how institutions navigate environmental commitments through the metallurgical-thermal coal distinction. This analysis reveals a crucial insight: the fungibility of coal types (with met coal being "up to three times as polluting as thermal coal") exposes the artificial nature of this differentiation. The deal structure suggests that banks are using the met-coal classification as a theological fig leaf to maintain ESG credentials while participating in coal financing. This indicates a broader trend where financial institutions reverse-engineer their exclusion policies to accommodate profitable deals.

🎯 The Hidden Leverage in AI Infrastructure Financing
Macquarie's $150 million financing deal with Applied Digital unveils a sophisticated approach to AI infrastructure funding. The deal's 0.25% interest rate appears deceptively low until one notices the crafty 1.11x to 1.35x return hurdle mechanism. This structure represents a new breed of hybrid financing that combines traditional debt traits with equity-like returns, staying under typical leverage metrics. The warrant component (1,035,197 shares at $9.66) suggests Macquarie is betting on the convergence of infrastructure and AI valuations - potentially reshaping how infrastructure funds approach tech investments.

🌊 The Rise of Disaster Capitalism 2.0
A significant trend emerges in the disaster recovery financing space. Haversine Funding's $7.0 million hurricane cleanup loan and $8.5 million forest fire funding reveal an emerging asset class built around climate disaster recovery. This represents how capital markets are adapting to climate change - not just through green bonds and sustainability loans, but by creating financial instruments that profit from disaster recovery. The pattern suggests the emergence of a counter-cyclical asset class that benefits from increasing climate volatility.

🏗️ The Infrastructure Arbitrage Play
Central States Water Resources' $325 million Brookfield-backed financing reveals a sophisticated play in infrastructure investing. The deal exploits the gap between public utility regulations and private capital returns, arbitraging the regulatory framework for municipal utilities. This structure allows private capital to extract premium returns from low-return utility assets by targeting underserved communities - effectively monetizing regulatory inefficiencies in municipal water systems.

🎯 The Strategic Default Opportunity
eCapital's $35 million facility for a Colorado-based digital printing company reveals an intriguing pattern in distressed debt opportunities. Rather than being a red flag, the company's default with its previous lender became a strategic entry point for eCapital to implement a covenant-light structure. This suggests a growing sophistication in how alternative lenders are using technical defaults as negotiating leverage to capture market share from traditional banks, effectively turning compliance failures into business development opportunities.

New Loan Programs
◾OVO and HSBC partner to offer flexible financing for green technology Read
◾ YouLend teams with Tpay to deliver financing solutions for Polish SMEs Read

😲 Didn’t see that one coming

◾ Helmsley Building faces foreclosure after defaulting on a $670M loan Read
◾ Blackstone's $275M Hotel Portfolio inches toward foreclosure Read
◾ Stoli Group US files for Chapter 11 bankruptcy protection Read
◾ Ideanomics plans Chapter 11 reorganisation to restructure debt Read
◾ UnitedHealth Executive shot dead in targeted attack in New York Read
◾ Nightingale CEO Elie Schwartz charged with wire fraud Read

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