To Unitranche Or Not To Unitranche

The debate continues as to whether today’s financing environment is as good, or better, than in 2007. But we tend to believe that, at least from a liquidity standpoint, conditions are more favorable than they were back then. Not only is debt readily available but for the first time there are two, very distinct, cash flow-oriented structures available to mid-market borrowers.


In Middle Market: Money, Money, Everywhere

A new year is always a good time for reflection and it can be especially prudent to look back and see if there were any trends that transpired during the past year that may affect the coming year. As we start 2013, two such trends that occurred in 2012 jump out.

Caution: Don’t Take Credit Just Because It’s Available

During the last few weeks, three finance companies successfully completed the IPO process to become publicly traded business development companies (BDCs), committed to lending to the middle market. The fundraises promise to add to a large, growing war chest of capital available to finance mid-market buyouts.

A Capital Structure For The Reluctant Seller

With income tax increases fast approaching, company earnings improving, and acquisition capital readily available, now would seem like an ideal time for owners to diversify their assets and seek liquidity.

Does Mezzanine Have A Future?

Over the years, the demise of mezzanine has been predicted countless times. Robust cash flow senior debt markets, prolific BDCs, and private equity groups funding mezzanine themselves have all caused the pundits to suggest that the end of mezzanine is near.

Is Equity Value the Same as Cash?

Are lenders playing fair when they demand sponsors put more cash into a deal simply to do an add-on acquisition that could easily be financed with debt?


Why Yields Are Not Going Down

We all know that interest rates are incredibly low. The three month Libor continues around 30 bps., an extremely low level designed to spur growth in the economy. Yet, other than asset-based loans priced at L+200 to 300, loans to middle-market companies continue to be expensive, and have not declined nearly in proportion to the […]

Ron Kahn: Seller Notes – Panacea or Pain?

So you finally find this great acquisition – one of your targeted industries, consistent performance, great prospects and strong management team. Oh yeah, it does have a couple of blemishes – some customer concentration, for one, but you’re comfortable with that. What nags at you are the two owners who started the company and are […]

Mezzanine Gets Another Chance To Shine

For the last 18 months, we’ve been extolling the virtues of unitranche debt. This structure has gained substantial popularity over the last few years as an ideal replacement for the cash flow senior debt that banks and CLOs no longer supplied as eagerly to the middle market following the 2008 credit crisis. With the ability […]

Ron Kahn: Does the Stock Market Really Affect Debt Valuations?

The stock market has seen incredible volatility during the last several months, and, unfortunately, the overall trend has been downward. But does a decrease in equity values affect the valuations of illiquid debt securities? The answer is yes. And why do we even care? Because many middle market lending institutions like BDCs, hedge funds, credit […]