Super G Provides $900,000 Airball Stretch Piece
Family-office backed U.S. manufacturer and supplier of specialty textiles.
The Financing Situation:
The Company was in the process of refinancing its existing senior credit facility with a lower cost ABL facility. However, there was insufficient collateral availability to pay off the entire senior credit facility balance. The Company’s M&E was already levered so the shortfall could only be solved with additional equity and/or a cash flow based term loan, often referred to as a “Stretch Piece.”
“Stretch Piece” defined – the portion of a loan that exceeds the amount supported by the underlying collateral and is dependent on support from the company’s cash flow or enterprise value. The Stretch Piece solves “financing gaps” also known as “airballs.”
Super G specializes in providing stretch pieces in a second lien position behind ABLs and worked closely with the Company’s new senior lender, Lighthouse Financial Corp. (“Lighthouse”), to quickly close a comprehensive debt refinancing. Super G’s second lien stretch piece allowed the Company to close its lower cost, flexible ABL facility with Lighthouse, thus avoiding an additional equity contribution. As a result of this structure, the Company lowered its overall cost of capital significantly.