The size of asset based lending (ABL) deals has increased
over time and with it the quality and sophistication of the
client's business in some cases. The increased use of flexible ABL
products has lead to a convergence of markets at the higher end so
that asset based lending now competes with lower end structured
finance lending in the wholesale banking markets. Of those larger
facilities there has also emerged a secondary market for suitably
syndicated or participated facilities. Whether syndicated or
participated depends on the arranger, the client and the
lender.
At the same time, as the asset based lending industry has grown
so the need for cash has developed within the independent (non-bank
owned) asset based lenders. This funding line is often fulfilled by
a back to back financing arrangement with a larger asset based
lender. This adds some degree of complexity and has its own legal
and technical issues for both the lender, the asset based lender
and its client facilities.
Our lawyers have worked on some of the largest and most complex
deals of these types in the UK marketplace. We have experience in
sourcing and documenting these financial arrangements, advising on
the underlying security arrangements and guiding clients on their
operational requirements. Equally we have experience in advising on
appropriate exit routes should problems arise and in working
through those exit route strategies to a successful collection
should those problems materialise.
