Regional Company
A collateral review was performed in connection with a Credit Agreement, which provided for a $20 million Revolving Credit Facility governed by a borrowing base consisting of accounts receivable and inventory. As this was the first Asset Based Loan undertaking by this hedge fund, we assisted the law firm representing the hedge fund in the writing of the Credit Agreement. Our examiners discovered during the field exam, major weaknesses in inventory controls, accounts payable irregularities and unsustainable past due receivables. As the collateral review was done after the credit agreement was created, the Credit Agreement was amended from a monthly borrowing base to a weekly, which we monitored on behalf of the client and a recurring quarterly field exam.
International Company
CoreVision was engaged by a bank group to conduct a recurring field examination of an International company which was being provided a $350 million, senior secured ABL facility subject to a borrowing base (BB). The exam was conducted at two United States and two European locations. The examiners identified the following BB errors and informed the lender and borrower; The Company excluded $90,000 as part of the Ineligible Jurisdiction calculation, the examiner excluded an additional A/P amount of $102,000 and excluded an inventory amount of $164,000, which the Company had excluded on the BB as “Other Ineligibles”, the Company excluded $302,000 of inventory for a European location with no Collateral Access Agreement in “Other Ineligibles” which was already being covered by the rent reserve.
Acquisition
CoreVision was retained to conduct a collateral review on behalf of a national bank whose borrower wanted to acquire another entity. As we were already performing recurring exams for the acquiring company, our engagement consisted of performing a collateral exam on the potential acquisition and creating a proforma borrowing base on the combined entity to support a $750 million secured ABL facility.
Credit Facility Expansion
Corevision was engaged by an Investment bank to conduct a revised collateral review on a current borrower that wanted to expand their collateral to increase its loan availability from $1.5 billion to $2 billion. Our exam consisted of reviewing other units that were previously not part of the credit facility.
