(BA&SF) last month completed a syndicated £280m receivables
financing deal with Palmer and Harvey (Holdings) Plc at a time the
banking arm is seeking to bolster its asset based lending (ABL)
capability.
The transaction, which coincided with a management buyout of
Palmer, was jointly financed by BA&SF and Burdale, an asset
based lending arm of Bank of Ireland (BoI). Last month BoI closed
its UK leasing business.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
BA&SF is looking to grow the value of its syndicated asset
based lending deals, which currently range in size between £5m and
£300m.
Gary Davies, head of syndications and structuring at BA&SF,
said the liquidity crisis in the US has meant BA&SF is “looking
less West at present” for partnership deals, although it is still
searching for deals with European arms of American clearing
banks.
BA&SF, which has a portfolio of around 150 ABL large
corporate clients, works with other divisions of the bank,
including its private equity arm, when structuring ABL deals. Its
key syndication partners include HSBC Commercial Finance, GMAC, RBS
Commercial Finance, Lloyds Commercial Finance, Bank of America and
GE Commercial Finance.
BA&SF is providing half of the £280m revolving receivables
financing facility to Palmer and Harvey, a longstanding customer of
Barclays, while Burdale, which worked five years ago with BA&SF
on a previous Palmer and Harvey MBO, has provided the
remainder.
Burdale is in the process of selling down 50 per cent of its
exposure, which includes £12.5m of the £50m senior debt facility,
also provided to Palmer and Harvey at the time of its MBO. Barclays
Leveraged Finance is providing the remaining £25m of the term loan
as well as a £117m loan note facility.
Palmer and Harvey Group, which has a £4bn turnover, is the UK’s
fourth largest privately owned company and supplies food,
confectionery and tobacco to over 61,000 customers.
Gary Davies said Palmer and Harvey is an attractive company to
lend to as it has a stable balance sheet and volatile cash flows,
meaning it will have a high demand for ABL.
Default risk is minimised by daily reporting of the collateral
movements and the banks having full control over the company’s cash
receipts. Palmer and Harvey also has credit insurance to mitigate
debtor default.
BA&SF, has been a long term provider of factoring and
invoice discounting facilities and is now offering Asset Based
Lending (ABL) which also incorporates inventory, plant and
equipment, commercial property and cashflow lending.
