Matthew Malone, CFA

WHOLE BUSINESS SECURITIZATION (WBS) - A POCKET OF FINANCING OPPORTUNITIES This week, Blackstone agreed to buy a majority stake in Jersey Mike’s and plans to finance the deal by expanding the existing whole-business securitization. What does this mean? Why are we suddenly hearing more and more about WBSs? Unlike traditional financing, WBS structures require creating new corporate structures that hold operational assets, IP, franchise agreements, or other value assets where debt is lent directly against those assets. Once those assets are in the new corporate structure, the legal documents “ring-fence” the assets in a credit box so only the WBS debt has a secured claim against those assets. Why would a company do this? Three key reasons:  1) Lower cost of capital: coupons are typically only a couple of points above SOFR 2) Longer maturities: even 50 years which is rare for corporate debt 3) Less covenants: WBS structure can lead to significant yearly dividends, asset improvement, reinvestments, and more, as long as specific ratios are covered and the operational assets maintain their value. What do creditors get in return? The underlying assets are not just collateral, they have been moved into a separate entity which gives them much greater protection. A fascinating and upcoming financing trend, let's go into more detail in the full writeup. https://lnkd.in/e2HTR3VN

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Check out another great interview between East Coast Capital Management's Richard Brennan and FundMonitors.com's Chris Gosselin, talking about our current State of Trend report. The discussion covers how Trend Following performed compared with traditional asset classes over the past quarter, as well as the positive divergence of the ECCM Systematic Trend Fund compared with a wider universe of trend following managers. https://lnkd.in/guVemQSK

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Deal updates on the Dealscribe platform this week: Executed doc changes Galaxy XXVI CLO - PineBridge Investments $328.75 million partial refi of class A to class D. Fitch no longer rates the notes. Amendments include changes to the ratings of class B-R, class C-R and class D-R and the classes eligible for repricing. Non-call period for the refinanced notes is 0.5 years. Trinitas CLO XIV - WhiteStar Asset Management $451 million partial refi of class A to class C. Moody's no longer rates the notes. Amendments include changes to the benchmark replacement language for the refinanced notes, the risk retention requirements and the EU transparency requirements. Non-call period for refinanced notes is 0.75 years. Voya CLO 2016-3 - Voya Investment Management $432.5 million partial refi of class A to class B. Amendments include changes to the classes eligible for repricing and to the definitions of FACTA, Bankruptcy Law and the Cayman requirements. Non-call period for the refinanced notes is 0.5 years. Notices ALME Loan Funding IV - Palmer Square Capital Management LLC The issuer is considering a redemption in whole via a liquidation. Man GLG Euro CLO I - Man Group Equity and manager are considering a redemption in whole via a liquidation. RRE 12 Loan Management - Redding Ridge Asset Management Manager is considering a partial redemption of the notes. Voya Euro CLO VI - Voya Investment Management Proposed changes to the definition of Defaulted Obligation and Fitch Rating. Class B have until12 June 2024 to object to these changes. Zais CLO 11 - ZAIS Group Equity is considering a redemption either in whole or in part through a refi. Redemption/refinancing notices: Anchorage Capital CLO 7 - Anchorage Capital Group, L.L.C. Equity has directed a redemption of the notes in whole through a refi. Apex Credit CLO 2020 Jefferies The manager with equity consent has directed a redemption of the notes in whole through a refi. Birch Grove CLO - AS Birch Grove LP Revised proposed third supplemental indenture relates to the refi of the notes in whole via a reset. Bosphorus CLO IV - Cross Ocean Partners The redemption threshold amount for the redemption of the notes in whole is €242,189,125.55. Marble Point CLO XVII - Investcorp Equity and the manager have directed a redemption in whole or in part through a refi. Neuberger Berman CLO XVII - Neuberger Berman Proposed amended and restated indenture relates to the refinancing of the notes in whole via a reset. Saratoga Investment Corp 2013-1 - Saratoga Investment Corp. The manager has directed a partial refi of classes A-1-R-3 and A-2-R-3. Voya CLO 2016-3 - Voya Investment Management Proposed third supplemental indenture relates to a partial refi of classes A and B. Wind River CLO 2020-1 - First Eagle Investments Proposed amended and restated indenture relates to the refi of the notes in whole via a reset.   Discover more on www.dealscribe.com #realintelligence #CLOdocservice #thedevilisinthedetail

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Earlier this summer, the Fifth Circuit Court vacated the SEC's Private Fund Adviser Rules (PFAR), offering relief to PE firms grappling with heightened oversight. In this article, Emilie Abate, former SEC compliance examiner and now a director at Iron Road Partners, spoke with Middle Market Growth about the broader impact and what's next for PE firms as the compliance landscape continues to evolve. While the SEC isn't backing down—NAV loans, AI, and cybersecurity are emerging areas of focus. Many PE firms are voluntarily increasing transparency, as investors demand more detailed quarterly reporting, even post-PFAR. https://lnkd.in/eJJsFPnS #PrivateEquity #Regulation #PFAR #Compliance #SEC

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The private equity (PE) middle market is showing signs of recovery, with dealmaking rebounding faster than the broader PE industry. Improved lending conditions and competition among lenders have boosted activity, with larger PE funds, like KKR and Thoma Bravo, seeking middle-market opportunities due to limited large-cap deals. In the first half of 2024, PE firms closed 1,699 middle-market buyouts, an 11.5% increase from last year, and total deal value is projected to reach $345 billion, potentially marking one of the segment's best years. Despite challenges in exits and fundraising, the positive dealmaking momentum signals a strong recovery ahead, especially with anticipated interest rate cuts expected to support future growth.

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Crux’s Alfred Johnson and Katie Bays talked to PV Tech about the fast-growing transferable tax credit market that has “blown the doors open.” They go deep on transferability, including Crux’s insights on pricing, competition, and deal dynamics. From Alfred: “The market for clean energy tax credits developed much more quickly than anticipated. The product is simpler and the base of buyers is significantly larger than existed for traditional tax equity. We estimate US$7-9 billion of 2023 credits transacted and expect the market to double in 2024.” Read more in PV Tech: https://lnkd.in/gNwWU2DZ

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Explore how Essex Capital Markets enhances financial strategies through tailored capital stack structuring and expert advisory. Read More: https://bit.ly/3zqlz7j __________ #essexcaptialmarkets #chicagocre #capitalstackadvisory

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📢 Going Live TODAY 📢 💻 "VC Best Practices for Transitioning Fund Administrators" 🗓 Wednesday, May 22nd ⏰ 10am PST / 1pm EST Join our Directors of Finance 👉 Lauren McDavid and Matt DiNardo, CPA for a #fractionalfinance discussion on how #VC firms can successfully navigate a fund admin change. Tune in at the link below👇 https://lnkd.in/giMEqZ5D

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“Speaking at LITFINCON on the Litigation Finance as an Asset Class panel last week, we discussed whether or not litigation finance is a mature asset class. I noted that while we have seen some maturity (e.g., specialized players, some transparency and standardization), the market is still in a frontier stage and not likely to become mature anytime soon. There is still a large lack of transparency in the space and wide variations in pricing, while the market remains very opaque. That is why it is important for law firms and clients to use an impartial advisor to help them navigate the market and also for law firms to work towards standardizing best practices. Questions that came up frequently included the discoverability of litigation finance, the use of insurance as a stand-alone product or in conjunction with litigation finance, and the emergence of secondary markets. I was proud to witness again and again that Westfleet Advisors is viewed as an industry leader and expert and those in the industry find our work product valuable as Westfleet Advisors’ industry report was cited often as a source for trends in litigation finance. Have the same questions or are you curious about the litigation finance process? Learn more and reach out so we can answer your questions: https://lnkd.in/e2-PBAv2.” -Wendie Childress, Managing Director and Counsel, Westfleet Advisors

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Alta (formerly Fundnel) Partners with Davidson Kempner Capital Management to Enhance Investor Access to Multi- Strategy and Asset-Based Lending Strategies "Alta is proud to partner with Davidson Kempner to bring industry-leading opportunities to our investor community. There's a growing demand for stable, income-producing portfolios and low-volatility strategies, especially amid persisting uncertainties in the markets, and we are addressing precisely that with this partnership. Alta is pioneering accessible avenues for alternative investments and this collaboration presents a distinctive investment opportunity aimed at breaking down barriers to enter private markets, enabling easy access to alternative assets typically reserved for high-net-worth individuals and institutional investors," said Muzahir Degani, Head of Private Capital Markets, Alta.   https://lnkd.in/eW_xuC4A Melanie Levine #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

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Fried Frank partner Rebecca Neuschatz Zelenka will moderate the panel, "Technology and Cybersecurity in Private Equity" at Markets Group's 12th Annual Private Equity New York Forum on May 15. Panelists will discuss how fund managers are dealing with rising cybersecurity challenges and the best approaches to solve and reduce vulnerabilities within their funds and across portfolio companies, among other topics. Click the link below for more details. #cybersecurity #privateequity

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In case you missed it: In a new viewpoints blog, ICI’s Associate General Counsel Matthew Thornton and Director of Industry Operations Kelly O'Donnell dive into why the fund proxy voting system does not match the needs of investors, and why the new U.S. Securities and Exchange Commission leadership should make improvements next year. Read more: https://bit.ly/3YX1UVC  

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📢 Meet Peter Goldstein , CEO of Exchange Listing LLC, Founder of Emmis Capital LLC IPO Fund, debunks the myth that micro and small cap entities must become the next "Unicorn" to go public and access equity markets. His book, "The Entrepreneur’s IPO," is a must-read for entrepreneurs seeking to understand the IPO process. 📚✨ Watch the full interview here⬇️⬇️⬇️ https://lnkd.in/eyP5n23K #Entrepreneurs #IPO #BusinessGrowth #StartupSuccess #business #news #newtothestreet

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As firms increasingly turn to syndicated debt as a way to fund borrowers’ larger financing needs, many of those firms are running into challenges relating to managing and servicing that debt. For those firms, a loan management platform that provides full functionality for syndicated debt could be a real game-changer. That’s where AXIS by AIO Logic comes into play! Check out some of the syndication functionality (listed below) available out-of-the-box with AXIS, and then head over to AIOLogic.io to learn more about all that AXIS has to offer!

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Fund administrators play an important role in many private equity firms’ operations. Some of the most common questions we get from clients during the scoping process are about how Quantium’s software works for GPs who use third-party fund administrators. In this blog, we discuss our most frequently asked questions on this topic with our Vice President – Client Solutions, Rui (Rae) Tan. Read more below. #fundadministrators #fundadmin #privateequity

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Get tips for guiding clients through a funding transaction to a successful closing, as well as practical advice on transaction management on Jan. 22 at the Massachusetts Continuing Legal Education, Inc. (MCLE│New England) webcast “Funding Fundamentals.” Peter Cifichiello will present at the webinar, which will include an overview of the types of equity funding instruments available to early-stage companies, including simple agreements for future equity, convertible notes, and preferred stock financings. Register today https://lnkd.in/ex6U9GFT #EmergingCompanies #Startup #Entrepreneur #EquityFunding

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