We accomplish refinancing in a number of ways:
- We obtain a specialty lender.
- We obtain a Debtor-in-Possession lender for companies in bankruptcy.
- We arrange for a hedge fund to purchase the senior bank credit.
- We bring in a private equity partner.
Obtain a specialty lender
Frequently it is possible to refinance the credit with another lender, which has specific experience in the collateral or the business. Certain lenders specialize in financing difficult credits and under-performing businesses, provided they are satisfied that the liquidation of the assets can secure the loan. OEM has refinanced a number of companies that were troubled or considered under-performing by their former lenders.
Certain lenders are looking for opportunities to lend money to debtors in bankruptcy. The bankruptcy court provides the lender with protections that give the lender comfort. There are a large number of secondary lenders interested in participating in this market.
Buyers of secured loans
We have close relationships with hedge funds, which specialize in buying bank credits and other senior secured loans from the original lenders. The loans are purchased by the hedge funds at a discount. The hedge funds, which then work out the loans over time, are generally much more flexible in cooperating with the debtor than might be possible for banks under the current regulations.
Private equity partners
We find that private equity firms aggressively look for partnerships with owners of businesses with scale and potential. While this option is seldom available for smaller companies, we can usually find private equity partners willing to invest in larger businesses with a good story to tell.