Tennenbaum Capital Partners has secured over $330 million in capital commitments for its first fund focused on debtor-in-possession (DIP) financing.
Tennenbaum Capital Partners, LLC (“TCP”), a leading private investment firm with extensive experience in distressed investing, today announced the second closing of Tennenbaum DIP Opportunity Fund, LLC (the “Fund”), an over $330 million fund focused on debtor-in-possession (“DIP”) financing.
“With the closing of this Fund, the first of our funds to exclusively focus on DIP financing, TCP will be able to assist companies severely affected by this downturn,” said Howard Levkowitz, Managing Partner of TCP. “TCP will partner with management teams and other parties to provide loans to enable debtors sufficient time to reorganize properly.” The Fund will lead, structure, agent and participate in DIPs and DIP refinancings, using TCP’s unique experience with distressed investing to guide debtors through their restructurings.
Debtor-in-possession financing, or DIP financing, is a special form of financing provided to assist companies under Chapter 11 bankruptcy protection. DIP financing is generally senior to other debt, equity, and any other securities issued by a company. DIP loans are generally put into place at the beginning of bankruptcy cases to provide immediate cash as well as ongoing working capital to allow a company to reorganize. DIP financing assists companies by restoring vendor and customer confidence in the company’s ability to maintain its liquidity.
The Fund targets DIP loans of a minimum $10 million. TCP has extensive experience working with companies in energy and power, manufacturing, media and business services, retail and consumer services, real estate, technology, telecom, and transportation, but will consider loans in all industries.
“This new DIP fund, comprised primarily of large institutional investors, puts us among the handful of firms that are willing and able to provide DIP financing,” said David Hollander, a Partner with TCP. “In the recent past, companies who otherwise would have been able to reorganize in Chapter 11 have instead had to restructure before they have time to reorganize properly or liquidate due to a lack of available financing. DIP Financing is an unprecedented market opportunity.”
“TCP has deep experience not only in DIP financing, but also other forms of distressed investing, and over the years has shown the flexibility to invest up and down the capital structure. This Fund builds on TCP’s history of providing financing in complicated situations or when financing is in short supply to help distressed companies emerge from difficult circumstances and achieve future success,” Mr. Hollander continued.
About Tennenbaum Capital Partners, LLC
Tennenbaum Capital Partners(TM) is a Santa Monica, California-based private investment firm. The firm’s investment strategy is grounded in a long-term, value approach, and it assists — both financially and operationally — transitional middle market companies in such industries as technology, healthcare, energy, aerospace, business services, retail and general manufacturing. TCP’s core strengths include in-depth knowledge of equity and debt financing vehicles in the public and private markets, as well as a thorough understanding of special situations. These situations may include legal, operational or financial challenges; turnarounds, restructurings and bankruptcies; corporate divestitures and buyouts; and complex ownership changes. For more, see www.tennenbaumcapital.com.