Interest Arbitrage Financing Completed

L. R. Nathan Associates has structured and closed a $10.9 million combination senior debt and tranche b financing package on behalf of a client whose objective was to reduce overall interest costs.  The proceeds recapitalized the balance sheet and included the $5.5 million paydown of high rate mezzanine debt that had been outstanding for a number of years.  The transaction achieved annual interest savings of approximately $500,000.

The company is the long-time exclusive distributor of the leading national brand of outdoor power equipment for much of the Northeast U.S.   Their track record of generating recurring, predictable cash flow enabled us to make the case for a cash flow-driven deal that included manageable leverage well beyond asset values alone.  The opportunity was referred to us by the company’s incumbent banker who sought our assistance in helping his client to meet its low cost funding objectives, which exceeded the bank’s appetite for unsecured loan exposure.