FBT Gibbons Asset-Based Lending
FBT Gibbons advises financial institutions, alternative lenders, private-credit funds, administrative agents, lead arrangers, borrowers and equity sponsors in sophisticated asset-based lending transactions. We combine practical transactional judgment with a detailed understanding of collateral, borrowing-base mechanics and the commercial drivers that shape ABL facilities.
Our lawyers guide clients from the initial design and collateral review of an ABL facility through negotiation, execution and post-closing matters, including modifications, refinancings and distressed-credit situations. We regularly handle bilateral, club and syndicated facilities, and we regularly lead transactions involving multiple jurisdictions, complex collateral packages and intercreditor considerations.
Broad Financing Experience
We advise on senior secured revolving credit facilities and term loans supported by accounts receivable, inventory, equipment, deposit accounts, securities accounts, intellectual property, real estate-related assets and other operating assets. Our experience includes facilities for companies in a wide range of industries, including consumer products, retail, distribution, manufacturing, healthcare, technology, energy, transportation and business services.
Our experience spans traditional middle-market ABL facilities and larger transactions involving bespoke collateral, capital-structure and intercreditor issues. Whether acting for an agent, a lender group, a borrower or a sponsor, we focus on delivering documentation and execution strategies that allocate risk clearly while preserving the flexibility needed to operate the business.
Representative Experience
Our representative ABL experience includes:
- Domestic and cross-border asset-based revolving facilities
- Single-lender, club and syndicated credit facilities
- Acquisition financings, including sponsor-backed transactions
- Borrowing-base facilities secured by receivables, inventory and other working-capital assets
- Term loan and delayed-draw structures used alongside revolving facilities
- First-in/last-out, first-out/last-out and other layered-capital arrangements
- Split-collateral, split-lien and intercreditor structures
- Unitranche, senior/mezzanine and other multi-tranche financings
- Incremental facilities, accordion features and uncommitted expansion capacity
- Letters of credit, cash-management arrangements and ancillary banking services
- Cross-border guarantees, security packages and multicurrency facilities
- Trade and supply-chain financing arrangements
- Amendments, covenant resets, extensions, refinancings and restructurings
- Distressed situations, forbearance arrangements, enforcement planning and workouts
Integrated Execution
ABL transactions typically extend well beyond a credit agreement and a set of lien documents. Our lawyers coordinate closely with colleagues in bankruptcy and restructuring, tax, real estate, intellectual property, regulatory, employee benefits, capital markets and M&A to address issues that can affect collateral value, priority, enforceability and closing certainty.
We bring particular focus to the operational provisions that make an ABL facility work in practice: eligibility criteria, concentration limits, reserves, reporting requirements, dominion and cash-control arrangements, collateral monitoring, field examinations, appraisals and notice mechanics. We produce documents that are rigorous enough for the credit profile while remaining workable for the deal team and the borrower’s finance function.
Commercial Perspective
FBT Gibbons understands that an ABL financing is often a core liquidity tool, not simply a closing event. We help clients evaluate structuring choices early, identify execution risks before they become obstacles and manage documentation efficiently through closing and beyond. We provide responsive, business-minded counsel that supports durable lending relationships and successful transactions.
Our Industry Knowledge and Experience
An asset-based credit facility is often key to the growth of a borrower engaged in manufacturing. Our ABL team and our firm understand the critical issues for a successful financing transaction with an asset-heavy manufacturing company. Since the capital stack for such manufacturers often includes subordinated debt from other financing sources, we are experts in effectively negotiating and documenting intercreditor agreements. The work we perform as counsel, analyzing collateral issues, particularly with machinery, equipment, and inventory, is our strength.
Our team’s deal experience in manufacturing is extensive. We have, for example, represented an international ABL lender as agent in a multi-currency revolving facility to an international textile company. This cross boarder transaction included both U.S. and European loan parties, and collateral across the world. We also work extensively in the auto industry, having represented an international ABL lender as agent in syndicated revolving and term loan facilities to a truck parts manufacturing company.
Food and beverage companies present unique risks for ABL lenders. We have advised our clients many times on the rights of growers and other third parties under the Perishable Agricultural Commodities Act and Packers & Stockyards Act. Our analysis of the impact of these laws on a secured party’s collateral has provided exceptional insight and risk assessment for our clients.
Our experience includes representing a national ABL lender as agent in syndicated revolving credit and term loan facilities to an international processor and supplier of popcorn. The core business of the borrower is the purchasing of corn products from growers, processing those products, and then shipping popcorn kernels to retailers and distributors worldwide. This representative transaction required our detailed analysis of the impact of state law grower liens and the PACA rights of the growers on the collateral.
Our ABL team understands the complexities of credit in the transportation and logistics industries. We have expertise with the interline trust doctrine that impacts financing of brokers and certain other logistics providers, as well as the collateral challenges that come with encumbering titles for entire fleets of vehicles under many different state title laws.
Our work in this sector includes representation of a national ABL lender as agent in syndicated revolving credit and term loan facilities for a large trucking and transportation contractor for the United States Postal Service. The status of the borrower as a government contractor necessitated an analysis of the Federal Assignment of Claims Act, as well as the documentation of contract assignments to protect the agent’s interest in the borrower’s accounts receivable. The borrower’s large fleet of rolling stock added complexity given our role in obtaining title liens and related assignment documentation.
The healthcare industry is constantly changing. Our ABL team is well informed about the changes impacting the industry and related financing transactions. We have experience dealing with the unique challenges that arise from Medicare and Medicaid receivables serving as collateral, as well as Medicare brand-tax, and highly regulated inventory.
We have represented parties in many healthcare financings, including an international ABL lender as agent in syndicated revolving credit and term loan facilities for a pharmaceutical company that supplies authorized generics across the world. This transaction involved regulated and licensed inventory, brand-tax issues, and complex supply arrangements, all of which required our team to perform a deep dive into the impact of each on the collateral.
Inventory on the water presents a number of challenges for ABL lenders that intend to provide borrowing availability for goods that have not yet reached the United States. We have worked closely with numerous customs brokers and other logistics providers to negotiate and document agreements which govern the rights of the broker, lenders, and borrower in such in-transit inventory.
Our experience, includes, for example, advising an international ABL lender in a revolving credit facility to an importer and wholesaler of minerals. The collateral for this transaction included substantial inventory in-transit, multiple logistics providers, and relatively complex agreements to protect the lender’s interest in inventory, while providing borrowing availability to the company.
Lending to retail companies often involves goods spread across hundreds of locations, branded inventory subject to trademarks and other intellectual property rights, and extensive treasury management arrangements. We have negotiated and documented ABL facilities for small and large retail companies, with inventory located in leased locations across the country.
Our work in retail includes representing a large ABL lender in bilateral revolving credit and term loan facilities to a national shoe retailer. The collateral included branded inventory which required our expertise in negotiating and documenting licensor agreements, permitting the liquidation of such inventory with trademarks intact. The treasury arrangement for this transaction also involved credit card receivables and a deposit account network that necessitated our analysis and advice to insure that the lender remained perfected on cash on deposit.
Key Contacts
Partner
Cincinnati, OH
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