ACAS Helps Launch Core Business Credit

American Capital Strategies has committed $300 million to help form Core Business Credit, a commercial finance company that will provide asset-based financing to middle market companies in the U.S. Core Business Credit also has secured a $125 million senior credit facility from Autobahn Funding Co.

 

PRESS RELEASE

 

American Capital Stategies Ltd. (Nasdaq: ACAS) announced today that it has committed $300 million to Core Business Credit, a newly-formed commercial finance company that will provide asset-based financing to middle market companies nationally. American Capital's investment takes the form of subordinated debt and equity. Core's senior management team members, consisting of Michael Haddad, President and Chief Executive Officer, and Executive Vice Presidents Milton Iskra, Paul Martin and Ken Cichocki, are also investing alongside American Capital. In addition, Core has secured a $125 million senior credit facility with Autobahn Funding Company, LLC, an asset-backed commercial paper conduit sponsored by DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main. This makes Core's total committed capitalization in excess of $425 million.

 

“In the current environment, middle market companies need access to capital and Core will provide an attractive solution,” said Bob Grunewald, Managing Director, American Capital Financial Services Group. “Core will be a unique combination of a national lender with a broad product offering, yet high-level customer service and access to senior management.”

 

American Capital has invested directly and through its funds under management approximately $9.2 billion in the last twelve months, $2 billion year to date and $870 million quarter to date. Not including funds under management, American Capital has invested approximately $7.1 billion in the last twelve months, $1.6 billion year to date and $640 million quarter to date. American Capital assisted in the refinance or syndication of approximately $2 billion of senior debt for its portfolio companies in the last twelve months, $356 million year to date and $55 million quarter to date. For more information about American Capital's portfolio, click here.

 

Based in Dallas, Core plans predominately to make asset-based loans secured by accounts receivable, inventory, equipment and owner-occupied real estate. It will also provide warehouse and rediscount loans as well as senior stretch loans to its customers. Core is targeting customers with annual revenues of $35 million to $500 million, at least one fiscal year of operating history and financing needs of $7.5 million to $30 million, with larger facilities syndicated.

 

“This investment from American Capital will help Core establish a reputation for being a well-capitalized, nimble and premier service provider, which is fully able to compete with a wide spectrum of larger companies,” said Michael Haddad, CEO of Core. “We look forward to working with American Capital and leveraging their knowledge and expertise in financial services.”

 

ABOUT AMERICAN CAPITAL FINANCIAL SERVICES GROUP

The Financial Services Group offers capital solutions for consumer and commercial finance, insurance and asset management companies. The Group invests throughout the capital structure, including senior debt, subordinated debt and equity, and can make investments of up to $800 million in each transaction. Companies interested in learning more about American Capital's Financial Services Group should contact Bob Grunewald, Managing Director, at (301) 951-6122.

 

ABOUT AMERICAN CAPITAL

American Capital is the only private equity fund and the largest alternative asset management company that is a member of the S&P 500. With $19 billion in capital resources under management, American Capital is the largest U.S. publicly traded alternative asset manager. American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital and its affiliates invest from $5 million to $800 million per company in North America and