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Leveraged Finance: How Asset-Based Loan Facilities Can Limit Recovery For Investors In Some U.S. Speculative-Grade Companies Aug 11 Product Image

Leveraged Finance: How Asset-Based Loan Facilities Can Limit Recovery For Investors In Some U.S. Speculative-Grade Companies Aug 11

  • ID: 1869618
  • August 2011
  • Region: United States
  • Standard & Poors

FEATURED COMPANIES

  • Accuride Corp.
  • Collins & Aikman Corp.
  • Diversified Machine Inc.
  • General Motors Co.
  • LKQ Corp.
  • Pinafore Holdings B.V.
  • MORE

Abstract
The appeal of an asset-based loan (ABL) facility to a lender is the element of control that the structure affords. The concept is that the lender never advances the borrower more than the realizable value at a quick sale of the collateral securing the facility. The borrower attests to this value at least monthly and upon each request for funds, and the lender usually has the right to verify, though rarely invokes this right in larger transactions. Also, the collateral most suitable to an ABL structure is the borrower's receivables--and frequently inventory as well: the most liquid assets other than cash. Speculative-grade companies (rated 'BB+' or lower) seeking to reset their loans are increasingly using asset-based revolving credit facilities as...

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

- Collins & Aikman Corp.
- Cooper Tire & Rubber Co.
- Dana Holding Corp.
- Federal-Mogul Corp.
- Ford Motor Co.
- The Goodyear Tire & Rubber Co.
- Mark IV Industries Inc.
- Navistar International Corp.
- Metaldyne LLC
- Exide Technologies
- Lear Corp.
- Harman International Industries Inc.
- Hayes Lemmerz International Inc.
- Transtar Holding Co.
- Remy International Inc.
- Penske Automotive Group Inc.
- Accuride Corp.
- FleetPride Corp.
- Sonic Automotive Inc.
- Tower Automotive Capital Trust
- Group 1 Automotive Inc.
- Stoneridge Inc.
- Dura Automotive Systems Inc.
- Tenneco Inc.
- Visteon Corp.
- Meritor Inc.
- Shiloh Industries Inc.
- AutoNation Inc.
- MetoKote Corp.
- Asbury Automotive Group Inc.
- Plastech Engineered Products Inc.
- TRW Automotive Inc.
- United Components Inc.
- American Axle & Manufacturing Inc.
- Affinia Group Inc.
- Cooper-Standard Automotive Inc.
- American Tire Distributors Inc.
- Commercial Vehicle Group Inc.
- KAR Auction Services Inc.
- Chrysler Group LLC
- Tower Automotive Holdings U.S.A. LLC
- Allison Transmission Inc.
- LKQ Corp.
- Pittsburgh Glass Works LLC
- Dayco LLC
- HHI Holdings LLC
- Diversified Machine Inc.
- General Motors Co.
- Pinafore Holdings B.V.
- Delphi Corp.
- International Automotive Components Group S.A.
- Henniges Automotive Holdings Inc.

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