Commercial banks face a number of challenges lending into leveraged transactions in the middle market, including increasing regulation and increasing competition from other debt providers. Principals of The Gaffin Group have worked with a number of commercial banks over the past four decades in setting up vibrant, successful middle market lending programs. These middle market commercial lending programs include clear, executable market penetration plans for both new business generation and for core business retention strategies. Both of these are critical for relevancy in the current market and foreseeable future. Additional programs have driven innovative, prudent capability-based programs from inception to profitable execution. The latter cases have involved more sophisticated lending products (second lien, leveraged lending) and more sophisticated market opportunities: equity sponsor coverage, leveraged lending participations, etc.
Principals of The Gaffin Group have had a front-row seat during the development and comment period of recent Leveraged Lending Guidelines, working with other banks and trade associations in responding to issues facing the industry. The Gaffin Group has worked extensively to develop practical, prudent responses to the Guidelines to allow banks to continue to participate (as direct lender or investor in syndicated facilities) in a market that – approached correctly – provides very attractive risk-adjusted returns.
The Gaffin Group helps commercial banking clients with advice and actionable program design across the lending spectrum related to specialized leveraged lending: from business development strategies, to negotiating and underwriting processes, to post-close account management. We have always believed that the ‘heavy lifting’ related to LBO lending begins the day after the close – when the investment thesis becomes operational. Our experience supports that performance drift is better captured by deal dashboards that go beyond backward-looking financial ratios. Experience as lender, advisor, and a financial executive all shape The Gaffin Group’s perspective on leveraged lending for commercial banks.
Look for more information on leveraged lending, analysis of cash flow deals, and emerging issues on this website. Let us know if you have questions on leveraged lending or are considering a more robust approach to this important credit segment.
Contact: Mark Gaffin firstname.lastname@example.org or phone 617 824 0517