Commercial lending

Bankers Healthcare Group, affiliated with Pinnacle Financial, is launching into securitization to branch out from its primary strategy of selling its medical-professional loans to community banks.

Investors shouldn’t assume anything about the behavior of speculative-grade debt in this environment.

If it’s approved, the charter is expected to lower the fintech’s cost of funds and allow for more product offerings. It comes nearly three years after SoFi pulled the plug on an earlier effort to open an industrial bank.

If creditors can now be pushed down the repayment pecking order without notice and have no recourse to fight back, they will be forced to reassess risk – and potentially demand higher interest rates – when granting loans and buying certain kinds of bonds.

Retailers and energy firms filed for bankruptcy protection in record numbers in the first half of 2020. Meanwhile, the volume of leveraged loans mandated but yet to launch is down 55% from the end of May.

Banks participating in the Main Street Lending Program were able to register for and offer credit to businesses last month, but the Federal Reserve said Monday it was set to make the effort fully operational.

The Senate had passed the bill Tuesday, shortly before the Small Business Administration was to stop accepting new loan applications.

Stakeholders in a $1.5B term loan (which include CLO managers) overwhelmingly approved the failed energy company's voluntary bankruptcy plan, providing them a 76% pro-rata share of new common stock in the company after it emerges from bankruptcy.

Money managers including Owl Rock Partners, Pretium and PGIM are racing to add workers with restructuring and bankruptcy experience as they take in record amounts of cash to buy cheap assets battered by the economic fallout of the coronavirus pandemic.

Restricted from taking on distressed debt or debtor-in-possession loans, CLO managers are being left out of opportunities in coronavirus-related debt restructurings. "It's frustrating," says one manager. "We are supposed to be the bully, not the one being pushed around.”