FOCUS ON DOWNSIDE PROTECTION
Structured as a cash flow loan but secured by a fleet of vehicles that could be liquidated in bankruptcy.
OpCo loan had full financial covenants and heavy amortization. Personal guarantee covered HoldCo loan.
Significant liquidity post-close, traditional ABL available with additional scale, hard asset liquidation value.
Given cash interest and amortization, fleet value at 2008-09 values covered loan within 2 quarters of close.
Strong liquidity post-close, new equity capital contributed, and cash flow positive business before growth CapEx.