Continuing his efforts in the use of intellectual property securitizations, Robert D'Loren of CAK Universal Credit Corp. said he is putting the finishing touches on a new $25 million bond deal backed by apparel-industry royalty payments.
What makes this deal particularly unique, D'Loren said, is the fact that the financing is being rearranged as a vehicle for a leveraged buyout of the issuer by its current management.
He said the company, which he refused to name but described as a "household name" in ladies' and men's fashion and eyewear, is packaging its royalty rights and trademarks into an off-balance sheet entity.
The vehicle packages the payment streams into an asset backed private placement, which has already been circled and should close by the end of September, D'Loren said.
The debt was rated by Fitch IBCA, which assigned a triple-B+ rating. While the securitization will raise $25 million, the actual royalty stream is worth approximately $40 million, he added.
D'Loren is also arranging for a $110 million securitization for other apparel names that he declined to name. He said that apparel royalty-backed offering is expected to close in a couple of weeks.