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Hello, and welcome to wheel 
deals on a, I'm Nicola sniveling

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and in this program, Real Deals 
takes a detailed dive into 

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asset-based. 
Lending. 

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I recently joined a group of 
lenders, advisors, and GPS on a 

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court. 
Take stock of where abl stood 

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after a year of covid. 
Disruption and to debate how a 

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BL has been used to fund New 
Deals and refinance existing 

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loans through the pandemic 
period. 

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The guests joining me for the 
discussion were Richard 

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babington from Mobius, Sarah, 
Dave, from, Hey, Potter, it 

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would Godfrey from DC advisory 
Jeremy Harrison from ABN. 

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Amro commercial finance and 
Oliver Jones from Rockland 

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partners. 
We kicked off discussion with 

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the look at the m&a market and 
hey, and how abl was used in m&a

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scenarios during a period of 
uncertainty. 

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Jeremy Harrison at avian 
commercial Finance, gave his 

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perspective on mending in a 
volatile market, and explained 

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why abl lenders were able to 
deliver financing packages. 

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At PACE in, fast-moving deal 
processes. 

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There is no doubt MMA did reduce
in terms of activity. 

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Last year. 
We saw that, but towards the end

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of the year. 
And September October November. 

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We you know, we were in a 
competitive situation and 

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deliberately did delete deliver 
on time for an m&a deal with 

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with with a p firm who was very 
used to using a BL part of the 

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complaint in the past has been 
Canadians really move quick 

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enough to keep in time with an 
m&a process and I'm very firmly 

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of the view. 
And I have been for a number of 

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years that we can, obviously, we
need the due diligence. 

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It's done on the collateral and 
that sometime is sometimes is is

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where things can be slow. 
But now now we've got, you know,

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independent firms that can be 
used that can get access that 

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can do things even remotely. 
Now, as we, as we seen in within

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the last few months, so I think 
that ABO it has to be a serious 

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contender in MMA very much 
though. 

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And, you know, I can, I can show
examples where we've done it. 

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And kept the deadlines, we have 
short lines of communication. 

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And if we really want to, and 
really need to, and really want 

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to work with particular p phone.
Which of course, we would we can

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deliver, and it's probably down 
to the lawyers then to help us 

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with the documentation DC 
advisory managing director, 

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Edward Godfrey, said familiarity
with the abl products or a 

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vendor pushing for a br. 
As a credible option with a key 

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predictors of whether GP, would 
use abl to finance the deal more

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sleepy. 
E firms, who are less familiar 

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with the product and for them. 
It's a more difficult challenge 

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to get over. 
But if we were a sell-side 

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situation with the vendor was 
absolutely pushing abl as a 

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credible option had laid the 
groundwork for a buyer. 

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I think that would be key for 
the less familiar buyers to 

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adopt a BL and it means a 
process can be more adapted to 

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suit an ABO lenders needs. 
Dla Piper partner, Sarah day 

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said abl with gained even more 
traction. 

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If asset surveys and valuations 
could be included in due 

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diligence processes as standard.
I think it's behoves all of us 

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in the industry to be 
encouraging that because what 

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makes it difficult? 
I think, or perceived as 

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difficult. 
I think it really boils down to 

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two things. 
One is the need for evaluations 

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and surveys, understanding the 
assets. 

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Well, I mean, if we can just 
Just get it to be more normal. 

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That there is an element of 
asset DD done as part of a 

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vendor or process, or at least 
it's an option that can be 

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pulled down quite quickly. 
And if we can find other ways of

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doing that, that as an issue 
goes away. 

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And again a lot of in some sense
that recruitment a lot of the 

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assets of online. 
So it's quite an easy thing to 

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do. 
But what did the GPS think about

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ABO rutland's? 
Oliver Jones said, understanding

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the abl offer. 
Was crucial for dealmakers, 

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considering using the product. 
The key is understanding The 

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Rules of Engagement both from A 
lender and borrower, and if you 

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really understand how it works 
and understand this point around

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the underlying asset is 
everything to these guys. 

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So the the key is understanding 
the quality of information 

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around that collateral how it 
gets police and reported. 

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And for me, most crucially how 
much Headroom you need to leave 

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as a borrower to deal with the 
what ifs Mobius is Richard, 

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babington said he was surprised 
AVL due diligence was cited as A

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barrier to uptake at all. 
As all investors should be 

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asking for the same information 
as a matter. 

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Of course. 
I think the abl lenders are 

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unashamedly lending on the back 
of of assets. 

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So it's entirely reasonable that
they should be able to see, you 

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know, an up-to-date age, debtor 
Leisure and up-to-date asset 

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register photos physical 
condition. 

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If it's manufacturing bit of Kit
with you know, with a counter on

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the side of it, to know what 
that looks like and a detailed 

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12 or 36 months cash flow to 
show how you paid off the debt 

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you take on. 
I think, I think if you've got a

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business that can't show that, 
I'd say it's less the abl guys 

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issue and more your issue 
because it's the basics that I 

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think you should be looking at 
whenever you make an investment 

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and the sort of countenancing 
going into a deal without that 

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knowledge of, that kind of 
information is quite tricky. 

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I think on the other side, when 
we're trying to be competitive 

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in deals, there are people who 
just don't do that nowadays and 

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then it becomes a tough thing 
because certainly if you're 

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trying to engage the other side 
and say, you've got to go around

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and count your widgets. 
And then someone else is not 

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saying that, then, that is 
tricky. 

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But to be honest, those guys in 
in the long run, we'll head for 

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a fall anyway, but I think a lot
of the stuff that were asking 

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for people should people should 
be doing as a matter. 

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Of course, even that's just good
business management. 

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Hey, B and M rows. 
Jeremy Harrison. 

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Agreed. 
I love ABO because what it does?

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It gives me that view on the 
debtor book and the cash. 

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All the assets. 
Because if it's if it's if it's 

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other assets as well as a BL, 
I've got a good view of what 

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going on and I like the 
reporting actually because it's 

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a good discipline for the 
business. 

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Particularly when you've got a 
carve-out from a PLC who 

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probably haven't been used to 
cash constraints in the past. 

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So so or more and more 
businesses owned by pe were 

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where you're going to be much 
more focused on cash than if 

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you're part of a much bigger POC
DC advisories Edward Godfrey, 

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said One silver lining to the 
disruption of the last year for 

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abl was that deal. 
Processes had slowed giving all 

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parties more time to understand 
the benefits ebl could bring to 

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the table. 
A lot of the are many processes 

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that are coming to Market. 
Tend to be a little bit more 

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difficult. 
They tend to be the not running 

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to the same aggressive 
timetables, on the halls. 

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There are maybe the year before 
and I think that creates a 

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little bit more room in the 
process to bring in more parties

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to address the So, the of the 
buyer in that situation and in 

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my experience, over the last 
year of the situations are 

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appropriate, the tend to be much
more collaborative between 

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buyer, buyer and seller. 
And I think that creates the 

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room that creates the 
opportunity for ebl to get the 

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audit done, for all the parties 
to get familiar with it and 

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creates a better chance, or 
maybe that's a foothold for the 

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years ahead of us conversation 
and then turn to refinancing 

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with rutland's Oliver Jones 
explaining. 

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Why launch Term relationships 
with lenders had proven 

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invaluable through the 
disruption of the last 12 months

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for would have to be a really 
good reason to want to refinance

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away from people who have 
supported you in the bad times. 

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And then the whole reason having
that long, long term mindset is 

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for precisely the reason why 
things like this year, when the 

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unexpected happens, you're not 
quite sure if, if it's a sort of

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syndicated loan, that's going to
different places and you don't 

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know who your counterparty is. 
It gets a lot more challenging 

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and dla Piper Serie de however. 
Said, she had been surprised by 

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the number of borrowers that had
refinanced with new lenders and 

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outline. 
One example of a borrower 

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switching from a syndicated 
credit. 

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Revolver to an AVL facility 
resource. 

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We did see a surprising number 
of refinancings in the sense of 

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re banking's or moving from One 
financial institution to another

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to walk, but not in that first 
flush, but towards that sort of,

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you know, the back end of locked
and one and that was driven 

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partly by exactly what you were.
NG at the beginning of lockdown 

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one, which other people just 
feeling unloved and I was 

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surprised because normally in a 
troubled Market you better the 

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devil, you know, but actually 
people were saying I wasn't 

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either troubled enough or big 
enough to get any attention and 

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I just wanted to move to I had 
an approach from another fund 

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354. 
A PLC from a syndicated large RC

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F onto a an AVL line precisely 
for that reason. 

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And once you start it, A 
mainstream in that sense. 

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And once you start each, it only
takes one positive experience 

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for each debt. 
Advisor Wang positive, 

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experience for a PE house and 
you begin to get that mindset 

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change. 
Finally conversation turned to 

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remote working and how a blsm d 
and workers had adapted to 

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restrictions on travel and 
meetings Mobius is Richard. 

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Babbington. 
Sid remote working had its 

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upsides, but that there was no 
substitute for being on site. 

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Right Richard babbington with 
the final word, still think you 

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want to be physically seeing 
things. 

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It's sort of scares the Vegeta 
you when someone pops and pit of

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PR PR up and they said we did 
all this virtually without 

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seeing the business, you know, 
all the houses, look great on 

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right move. 
But it's only when you go from 

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door with you find out whether 
it smells of cigarettes or not. 

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So we still wanted to go and 
physically on site for the sniff

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test, but to the extent, we can 
blend, you know, can blend the 

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two working virtually can be 
quite efficient, but I still 

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want people going on site and 
looking looking. 

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Under the table.