hat would you say are some
of the most pressing issues in
the middle-market industry?
How are you addressing
DEPLEDGE: A concern for a lot
of businesses in the U.S. is what
will happen with the Presi-
dential elections. People are
wondering what impact the election will have on the regulatory
environment, the interest rate environment and fiscal policy.
Our business line specializes in the middle-market and mid-corporate space. As a broad business sector, there are many
industries within this so it’s difficult to paint the sector with
the same brush, because some industries are doing better than
others. The building materials space for the housing industry,
for example, is doing very well. On the other hand, the energy
industry is operating in a highly challenging environment. Other
industries are going through transformational change such as
retail; e-commerce vs. brick and mortar. Change brings many
opportunities for asset-based lenders.
We are able to be on the forefront of understanding the
implication of change in the business environment because of
the extensive industry research and experience that is within
our firm. There are various types of lending products that can be
deployed in different industry sectors. So that’s one way we try
to stay ahead of change and address a risk-reward paradigm.
MARSICANO: Things looked promising in the beginning of the
year. I would have thought by the second quarter things would
have been a little more active in the marketplace. We haven’t
necessarily seen that.
No one knows what direction we’re going into. While the Fed
did raise interest rates at the end of 2015, there was an initial
thought that rates would continue to be raised quarterly and that
would begin to drive business in lending and, ultimately, be good
for ABL. It hasn’t continued as people had originally thought.
We’ve been in the cycle now for the last several years and
we look at the slow growth, the GDP and the overall economic
environment of the country, and I think where we play in the
lower-middle-market, we’re seeing slight declines in business
performance. Add the Presidential election year and everyone is
waiting to see what happens. Overall, there are a lot of different
sources of capital and not enough deals. New lenders continue
to pop up, whether they’re factors, asset-based lenders or cash
flow providers of senior and subordinated debt, all looking for
a piece of the pie. Though ABL has been slower than we thought,
our lower middle-market mezzanine/sub-debt product, through
Medallion Capital, has been very active.
PHILBRICK: The middle-market is a very interesting sector
because I view it as the backbone of the U.S. economy. Middle-market companies have a great view into the economy and
business head - Asset Based
Lending at Citibank, N.A
president, Asset Based Finance
Division, U.S. Bank
senior vice president,
Medallion Business Credit
national origination executive,
Regions Business Capital