Tag archives: financing

Location, location, location: Where’s your chief executive office?

In the context of cross-border secured financing transactions involving Canada and the United States, the rules relating to perfection and priority of personal property pledged in favour of a lender or agent are similar. In the U.S., Article 9 of the Uniform Commercial Code governs while each Canadian jurisdiction has its own personal property security regime.

The PPSA is largely based on the UCC framework and the PPSAs of each common law Canadian jurisdiction are generally very similar to each other. There are however, a few key distinctions between the UCC and the PPSA, one of which will be discussed … Continue Reading

Money makes the world go ‘round: lender protections in leveraged acquisitions

With Canadian prime and US federal interest rates maintaining an all-time low since the 1980s, the current market is well-positioned for leveraged acquisitions. Whether a purchaser does not have the liquidity to acquire a business or believes the potential growth of the investment will outpace any interest accumulating, the use of borrowed money to purchase a company is a shrewd business move.

Notwithstanding the favourable market conditions for leveraging, purchasers should expect that lenders will require certain lender protections in the acquisition agreement.

Xerox provisions

Introduced during the acquisition of Affiliated Computer Services, Inc. by Xerox Corporation (hence the “Xerox… Continue Reading

Financing with non-bank lenders

Currency

Non-bank lenders are increasing their market presence in both acquisition financing and the provision of financial solutions for ongoing operations, including in the asset-based lending context.  The increased presence of non-bank lenders seems to be driven by both the benefits of working with providers of non-regulated alternative capital source funding and the regulatory limitations faced by traditional bank lenders.

Banks are facing increased regulation which in some cases has the effect of restricting their ability to underwrite “riskier” transactions and may require the inclusion of loan covenants which do not suit a borrower.  In the event there is a change … Continue Reading

Tips for early stage companies and thinking ahead to an exit: part 2

In part 1 of this series, I discussed the importance of setting a good legal groundwork for an early-stage company, focusing on the areas of intellectual property, capital raising and employee relations. This post elaborates on issues encountered by start-ups in the context of financing efforts. Note that both posts are written from the perspective of “exit preparedness”; that is, common issues are canvassed that can either pose difficulty or create unexpected costs in the context of an exit. But the ideas discussed shouldn’t necessarily be limited to this perspective; rather, they are business and governance points that are … Continue Reading

Future of private equity leveraged buyout financing optimistic

Recently, RR Donnelley sought the assistance of Mergermarket Group to interview professionals in the US, Europe, and Asia-Pacific about leveraged buyout financing. Mergermarket Group published its survey results on the environment of leveraged buyout financing in its April 2015 edition of the Venue Market Spotlight.

Availability of buyout financing

A majority of survey respondents indicates that the availability of buyout financing will increase in the next 12 months. Specifically, 52% of respondents state that buyout financing will somewhat increase, while 8% of respondents believe that buyout financing will increase significantly. However, 32% of respondents expect buyout financing to decrease … Continue Reading

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