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Nationwide Commercial Loan Acquisitions

Business Acquisition Financing

The acquisition of another company using a significant amount of

borrowed money (bonds or loans) to meet the cost of acquisition.

Often, the assets of the company being acquired are used as collateral for the

loans in addition to the assets of the acquiring company.

The purpose of (Leveraged Buy Outs) is to allow companies

to make large acquisitionswithout having to commit a lot of capital.

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Where do you go when the Banks say No?

We are saying YES, when Banks are saying NO!

TYPES OF LBOS

LBOs are typically used for three purposes, each in the category of corporate acquisitions generally. These are 1) taking a public company private, 2) financing spin-offs, and 3) carrying out private property transfers frequently related to ownership changes in small business.

Public to Private

The first situation arises when an investor (or investment group) buys all of the outstanding stock of a publicly traded company and thus turns the company into a privately-held enterprise ("taking private" in reverse of "going public"). These deals may be friendly or hostile, the two terms related to management's point of view. Friendly cases typically involve the management buying the company for itself with plans to operate it thereafter as a privately-held entity. Hostile cases involve an investor or investor group intent on buying, reorganizing, and then reselling the company again to realize a high return. The sale of the company may be to another company or may be to the public in a stock offering. In the last case the situation actually amounts to a transaction more aptly labeled public-to-private-to-public. There are other variants in the disposition or in the payback of a third-party investor, although they tend to be rare, such as very high dividend payments and recapitalization by other groups.


Spin-Offs

Public or private companies often wish to sell off elements of their business to get cash. In some cases the seller may itself have been bought in an LBO and is spinning off assets to pay the investors back. In such situations the spun-off element's management may itself be the buyer or may be passive in the transaction. An LBO is used to purchase the subsidiary or division in question. The fundamental financial logic of such deals, however, remains the same.


Private Deals

The last situation concerns cases where a privately held operation is bought by an investor group. Such cases often arise when a small businesses owner, having reached retirement age, wishes to divest him-or herself of the company and either cannot find a corporate buyer or does not wish to sell to a company. The buying group itself may be the company's employees or individuals associated in some way with the owner. These people organize an LBO because they only have limited equity.


FINANCING AND PAYBACK

The target of an LBO must, almost by definition, be profitable, growing, and produce a suitably large cash flow. In acquisitions jargon this is often abbreviated as EBITDA, meaning earnings before interest, taxes, depreciation, and amortization—the component elements of cash flow as ordinarily defined. Why cash flow? Because repayment of the large, leveraged debt is from future cash flows of the company. Other assets, of course, are also taken into consideration. If cash flow cannot keep pace with repayment, it is desirable that the company has saleable components (e.g., potential spin-offs) or liquid assets. Third party investors cannot be persuaded to put up cash unless the numbers look good, the elements of the company seem easily saleable, the company has lots of cash on its books, or all of the above are present.


The leveraged portion of the LBO may be as high as 90 percent of the deal but can be lower. In periods of unusual frenzy, the percent has even climbed above 90 percent. The rest is in the form of equity. Multiple "layers" of financing are involved: senior debt, senior subordinated debt, subordinated debt, mezzanine debt, bridge financing, and finally purchaser's own equity. The instruments described here are listed in increasing order of risk. In the case of a default, those holding senior debt will be paid first, owners of equity last (if at all); these security relationships are contractually built into the instruments themselves. Mezzanine financing is a hybrid between straight equity and debt, structured so that "mezzanine" holders are just barely paid something in an extreme case where equity holders lose everything. Bridge loans are short-term loans intended to be repaid either from the acquired company's cash holdings or from rapid disposition of company assets. Debt, of course, may be in the form of high-yield and therefore high-risk "junk" bonds.


LBO risks are high because payback depends entirely on the company's future performance. If the economy falters—or some event halts the purchased company in its tracks (a major lawsuit, the loss of a major account)—or if the high re-payments actually hamper the company by starving it of capital, investors may see their money turn into thin air. Healthy, growing, cash-rich companies purchased by an LBO therefore may lose their flexibility by losing their cash and simultaneously acquiring a huge load of debt: small shocks in the past become large shocks in the present.

For these reasons investors expect returns above 20 percent per annum.

RilCorp. Brokerage operate as a secondary marketing firm specializing in the sale and acquisition of commercial real estate mortgage loan(s), Mortgage, Trust Deeds, Land Sale, Business, Yacht, & Aircraft Contracts, pools and bulk portfolios welcomed, and much more... CLICK HERE


RilCorp. Brokerage represent Companies that provides loan sales, and acquisition services for performing, sub-performing, non-performing and distressed commercial loans.


As the demand for mortgage assets intensifies in the secondary market, RilCorp. Brokerage is focused on:

identifying loans for sale, establishing new relationships and utilizing our existing client base to maximize each loans execution.


Our clients consist of Financial Institutions, Insurance Companies, Mortgage Banking Firms, Funds, Private Investors, and other owners of commercial mortgage loans.


Please contact us, if you have a loan, pool of loans, or bulk portfolio's available for sale; or if you have an interest in buying, commercial mortgage loans, pools or bulk portfolios. Click Here


Our Firms actively pursues the following types of individual commercial real estate mortgage loans, and bulk portfolios:

  • Commercial / Industrial
  • Multi-family (MF)
  • Retail
  • Office
  • Hotel / Motel (flagged or unflagged)
  • Congregate Care
  • Specialty (Gas Stations, Churches, Self-Storage, Mobile Home Park, etc.)

RilCorp. Brokerage represent Firms, that have facilitated loan sales, and purchases of commercial real estate mortgage loans, up to $500 million, and portfolios in the billions.


Objective:

Provide discrete access to an exclusive marketplace for buyers and sellers of commercial mortgage loans.


Transaction Process:

The Companies we Represent, have transactions performing on a "negotiated basis" as opposed to a "sealed bid" process. A Letter of Intent (LOI) is normally issued within 48 hours of receipt of the loan information.


This allows sellers the advantage of only entertaining only those offers that meet their pricing requirements and obtaining highest value for their loans.


Purchasers prefer this method because it conserves underwriting and due diligence resources.


Due Diligence & Closing:

Following acceptance of the LOI, due diligence and closing are usually completed in 4 to 21 business days.

Loan Parameters:

  • Any performing, sub-performing and/or non-performing commercial real estate loans and/or participation                                                                                                                                                                       
  • All loan types including: Commercial / Industrial, Retail, Office, Multi-Family, Hotel, Congregate Care and Specialty (Gas Stations, Churches, Convenience Stores, etc.)                                                                       
  • Individual loan sizes up to $500 million                                                                                                                        
  • Portfolio sizes of any size                                                                                                                                                  
  • No geographic limitations                                                                                                                                          
  • Fixed or adjustable rates

April 21, 2009 - Tapping Hidden Liquidity

from an Existing Loan Portfolio

In today’s market, loan sellers often overlook liquidity within their existing portfolio. Would it surprise you to learn, that selling “loans you are not 100% comfortable with” (i.e. maturing, pre-watch list and watch list commercial mortgage loans) can provide higher executions than performing, or distressed commercial mortgage loans?


Well guess what, today they can, and in most cases are!

RilCorp represent Companies that are demanding loan committees to keep this in mind as they evaluate their commercial mortgage loan portfolios for loans that DO NOT reflect their current internal comfort levels.


The sale of these loans will allow you to redeploy liquidity as needed and will strengthen your balance sheet.


This limited window of opportunity for selling your commercial mortgage loans that DO NOT meet your comfort levels is available now.


The bottom line is to ask yourself, would you be willing to sell these loans for the right price today? If so, please contact one of our representatives to discuss.


Here are the simple facts: this newly released liquidity will permit you to re-lend at current market rates, increase spreads and earn new origination fees while strengthening the overall quality of your commercial loan portfolio.


Call us today to tap your hidden liquidity from your existing commercial mortgage loan portfolio!!!

April 2009 - FASB Changes Create a

Market for Maturing Seasoned Loans

RilCorp. Brokerage has an immediate interest in acquiring your maturing commercial mortgage loans as FASB rule changes have created an opportunity for mature commercial mortgage loans.


The ideal maturing commercial mortgage loan(s) have performed as agreed; however interest in extending or re-writing matured loans has diminished.


RilCorp's resources specializes in the secondary marketing of performing, matured and distressed (sub-performing and non-performing) commercial mortgage loans that are secured with commercial real estate.

March 2009 - First Quarter Update:

As the end of the quarter approaches,

RilCorp. Brokerage would like to take a moment to update you with new opportunities we have for performing and distressed (sub-performing and non-performing) commercial mortgage loans that you may have in your portfolio.


With buyers and sellers returning to the market, continued deterioration in the real estate values, and personnel being stretched due to being reallocated to areas of immediate concern, we offer several solutions to assist you with the performing and distressed (sub-performing and non-performing) commercial mortgage loans, including construction and development loans.


RilCorp. Brokerage only represent Companies that set themselve's apart from the constant calls that bombard your offices, and burden your resources because our business model is based upon private discrete negotiated sales, long standing relationships, knowledge of the commercial mortgage market and over 30 years of experience in secondary marketing.

Performing Commercial Mortgage Loans


1) For utilizing liquidity, RilCorp represent Companies that has performing commercial mortgage loans available for sale with excellent yields, with or without seasoning, and can identify loans specific to your purchase parameters and present them to you for a “private negotiated purchase.”


2) For achieving liquidity, RilCorp's resources, represents clients nationwide with low-cost of funds interested in acquiring performing commercial mortgage loans at realistic executions.


A major improvement from what the market has experienced in recent months with deep discount buyers.


Our resources's clients, like you, have limited windows of opportunity for acquiring loans, so we need to be kept informed on an ongoing basis of what loans you may have available or considering for sale.

Distressed Commercial Mortgage Loans

We have companies that can assist you in freeing up resources, as distressed loans increase and utilize more of them.


Here is how, as soon as a loan is categorized as problematic or of concern, Worldwide can immediately arrange a private sale based upon an acceptable indication of value.


A timely, discrete negotiated sale will optimize your return by freeing up capital for loan acquisitions; based upon your purchase parameters and position you for new loan originations.


In addition, resources allocated to distressed loan workouts can return to income generating activities.


Worldwide distressed buyers are indifferent to loan modifications or owning the real estate and are categorized by geographic interests, property types and loan sizes.


As such, please understand that Our resources need to see the loan, and understand the entire history behind it, in order to price it.

December 2008 Year-End Update:

Yield requirements for performing commercial mortgage loans in the secondary market are at decade highs; making par and premium executions nearly impossible in the short-term, with few exceptions.


Credit markets remain constrained, and lenders are experiencing increased commercial mortgage loan delinquencies.


As a result, the market is anticipating a rise in distressed commercial mortgage loans for 2009.

In the absence of a normal market, Our resources have shifted their direction, and focus to assisting sellers at mitigating losses from sub-performing, non-performing and distressed loans.


We have companies that created a custom tailored solution which offers aggressive executions for sellers on a regional basis.


In addition, RilCorp. Brokerage represent Firms, that focus on individual commercial mortgage loans, as opposed to a pool or portfolio mentality, and identify buyers that will maximize a loans execution.


Sellers receive the highest executions possible and avoid the pitfalls associated with the mass marketing of distressed loans.


How to get started, first take a few minutes to review your commercial mortgage loan portfolio for loans that you may want to sell in short-order.


This process will help you prevent further losses, free up capital, recover loan loss allowances or reserves and assist you in repositioning loan originations toward current market yields.


Once the commercial mortgage loans have been identified, provide us with the required loan documentation for performing, sub-performing, non-performing or distressed commercial mortgage loans for an indication of value and / or loan sale.


The format for the required loan information can be found in our October 2008 Update below.

November 2008 Market Update:

The government has decided not to buy loans from financial institutions.

This situation will challenge financial markets and institutions to re-examine their ability to manage liquidity and the direction of their businesses.


As such, the best option available for increasing liquidity and returning to originations remains the secondary market.


Our resources has several funds available that can provide liquidity at fair market value for performing, sub-performing and non-performing commercial mortgage loans, pool or portfolios.


Now is the time and window of opportunity to start a sale that can actually close that will provide liquidity, portfolio restructuring and the ability to originate new loans at current market levels.


Alternatively, you may want to know the fair market value of your loans, even if now may not be the right time for you to sell. If that's the case, please give us a call.

October 2008 Market Update:

Even with credit remaining constrained we have the resources to provide liquidity via whole loan sales of commercial mortgages.


We represent Companies, that have several funds aggressively acquiring performing, and sub-performing commercial mortgage loans nationwide, excluding raw land.


Please note seasoned performing loans are experiencing the highest executions. Loan pool pricing options and documentation requirements for indications of value are presented below.

Loan Pool Pricing Options:

  1. Performing pools.
  2. Sub-performing pools
  3. A blended execution for performing and sub-performing pools.

Loan Pool Required Documentation:

Performing Pool - Just complete our spreadsheet (click here to download).

Sub-performing - Complete our spreadsheet (click here to download), provide a brief history / summary on the loan with recent updates, pay history, note, appraisal and rent rolls.

September 2008 Market Update:

Credit continues to tighten while risk based spreads continue to increase for commercial mortgage loans.

Cooperation for overnight lending between banks is expected to improve as consolidations and resolution for the existing credit crisis begin to take hold.


The need for liquidity still exists; while secondary marketing sales activity for commercial mortgage loans is expanding at historic levels.

The best method for managing liquidity in this environment remains whole loan sales.

July 2008 Market Update:

RilCorp. Brokerage, represent Companies that are very active in the commercial mortgage loan market, and would like to take this opportunity to provide an update, and have companies take a look at their existing portfolio to see if portfolio augmentation would be beneficial.


Whether you are looking for liquidity, adjust geographic, or loan type concentrations, enhance your weighted average coupon (RIL), or reduce classified assets, we are available to discuss your options.

Current market for commercial mortgage loans:

Maintaining liquidity remains critical because:

  • Existing portfolio weighted average coupons are narrowing as the costs of funds are increasing (margins are decreasing even as credit risk spreads increase).
  • Credit risk spreads continue to increase as underwriting guidelines continue to tighten.
  • Uninsured funds are being siphoned out of institutions
  • Portfolio executions can be optimized as long as they are not mass marketed.
  • Quiet, private negotiated transactions that fall under the radar maximize executions.
  • Recycling funds through the sale of existing loans results in higher margins from fees and re-lending at higher rates.

Our resources provides the following strategic services:

  • Sale/Acquisition/Participation of commercial real estate loan(s) and portfolios, regardless of performance..
  • Targeted loan portfolio sales and acquisitions for liquidity, mitigating geographic and product type concentration risk.
  • Secondary marketing services for Bank Holding Companies actively involved in Mergers & Acquisitions.

RilCorp Companies, differentiates themselves from others by presenting a sellers' loan(s) to only one buyer at a time on a, "for their eyes only" negotiated basis.


It has been our experience that significantly higher executions are achieved when portfolios are strategically marketed in this manner.


RilCorp. Brokerage welcomes the opportunity to discuss your commercial loan needs and encourages you to contact one of our representatives with questions or comments CLICK HERE

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