MasterClassTM

 Capital Roundtable

Partner

Practising Law Institute

Sponsor

Proskauer Rose LLP

Media Partners

Thomson Financial The Deal Capital IQ

SECOND LIEN LENDING

Why the Second Lien Market Is Staying So Hot,
& How You Can Benefit From the Competition
It's Giving Traditional Mezzanine & Senior Financiers

Featuring 20 Expert Speakers

Earn CLE Credits

Wednesday, January 26, 2005
8 am - 5 pm

NYC Bar Association
The Great Hall
42 West 44th Street

Designed to Meet the Needs of Middle-Market Investors, Lenders,
Investment Bankers, & the Professionals Who Advise Them

Faculty | Schedule | Registration | Location | Audiotapes | CLE/CPE Credit

The hottest segment of the buyouts market these days is that once-boring middle piece of the capital structure where mezzanine has long been the dominant tool.

Everybody used to call it a "sandwich," with senior secured debt on top, equities on the bottom, and mezzanine notes in the middle.

But now the simple sandwich has transformed into a "dagwood," and that change is causing confusion, even among the experts. For example, the mezzanine and senior layers have splintered into nearly a dozen different instruments with labels like "term B loans," "SCIL," "last out tranche," "stretch senior," and "tranche C," and terms like "standstills" and "waterfalls" have evolved into everyday lending documents. Collectively all these are related to "second lien loans," but each has very subtle but important differences.

The second lien market has skyrocketed to $11.2 billion in the first 10 months of this year, up from only $70.0 million in all of 2001. Fueling this huge increase are the hedge funds who have arrived with all the decorum of thirsty elephants shoving their way to a watering hole. In their search for returns they no longer can find in the stock market or in distressed debt, these funds are now willing to accept the increased risk of a junior position in order to gain a better return.

By attending this special MasterClass, you will learn what exactly the breeds of second lien loans are all about, why they are so increasingly popular, what the intercreditor issues are, why some less experienced fund managers may be getting in over their heads, and what predictions experts are making about where this market is going. Most of all, you'll get a sense of how your colleagues are negotiating and structuring their deals, and how they've wrestled with problems you may be about to face.

Attend This MasterClass and you'll learn:

  • What exactly are second lien loans and why are they so popular now?
  • What are the differences among Term B, Term C, SCIL, Second Lien, Last Out Tranche, and stretch senior?
  • General perspective on the second lien marketplace, its evolution, and supply and demand factors influencing the recent surge in volume.
  • What are the key intercreditor issues?
  • The difference between the origination market and the syndicated market.
  • Why are hedge funds involved?
  • What are the typical structures and terms?
  • How has the syndicated loan market made second lien loans very efficient, and has it trickled down to the middle market?
  • What are the differences between mezzanine and second lien debt, and how are mezzanine funds coping with the squeeze?
  • How has the bond market been influencing second lien debt?
  • What is the future of second lien lending -- is it here to stay?

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Faculty

Chaired By

  • George "Chip" Stelljes III, President & Chief Investment Officer,
    Gladstone Capital Corp.



Hosted By

  • Burt Alimansky, Managing Director, Alimansky Capital Group Inc., & Chairman, The Capital Roundtable

 

Speakers

  • Michael Arougheti, Managing Director, Ares Management LLC
  • Richard Bochicchio, Managing Director, Back Bay Capital Funding LLC
  • Neil Cummings, Partner, Proskauer Rose LLP
  • Steven M. Ellis, Partner, Proskauer Rose LLP
  • Michael Ewald, Senior Vice President, Sankaty Advisors/Bain Capital LLC
  • Timothy D. Fording, Cerberus Capital Management LP
  • Christopher P. Fuller, Principal, Harvest Partners Inc.
  • Charles F. Garoklanian, Senior Vice President, PNC Business Credit Corp.
  • Laura P. Gladstone, Managing Director, Gladstone Capital Corp.
  • Buddy Gumina, Partner, Saunders Karp Megrue LP
  • William Koslo, Managing Director, CIBC
  • C. Todd Kumble, Partner, SPP Capital Partners LLC
  • Charles P. McCusker, General Partner, Patriot Capital LP
  • Michael P. McGonigle, Managing Director, GE Commercial Finance
  • Neil H. Rothenberg, Xerion Partners
  • Durant D. "Randy" Schwimmer, Managing Director, BNP Paribas Securities Corp.
  • Timothy C. Shoyer, Managing Director, NewStar Financial Inc.
  • Alexander B. Wright, Vice President, GSC Partners
  • Zac Zeitlin, Silver Point Finance

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Schedule

07:30 - 08:30
08:30 - 09:00
09:00 - 09:45
09:45 - 10:15
10:15 - 11:00
11:00 - 12:15

12:15 - 01:15
01:30 - 02:30

02:30 - 03:30

03:30 - 03:45
03:45 - 05:00

   

Registration, Networking, Continental Breakfast
Welcoming Remarks & Audience Introductions
First Keynote -- Overview -- Trends & Forecasts
Coffee & Networking Break
Second Keynote -- Chairman Welcome
First Panel -- Structuring and Negotiating Intercreditor Agreements for Second Lien Loans
Luncheon & Networking
Second Panel -- The Various Players -- How Do New & Existing Entrants See the Market & What Are Their Differences In Lending Styles?
Third Panel -- Impact of Second Lien Lenders On Other Players in the Capital
Structure
Coffee & Networking Break
Fourth Panel -- Lessons Learned from the Voices of Experience

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Registration

  Purchase Audiotapes >>

You can pay by credit card (using the links above) or by check: Mail your check and business card to: New York Business Roundtable Inc. 14 East 44th Street, Suite 400, New York, NY 10017.

Have a special question? Please contact Nicole Cibotti at 212/832-7333 or by email to: ncibotti@capitalroundtable.com.

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Location

NEW LOCATION
NYC Bar Association
The Great Hall
42 West 44th Street

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Audiotapes

Can't attend but want to hear the program? You can buy the audiotapes along with the handouts for $495. Purchase the audiotapes online now.

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CLE & CPE Credits

CLE are available for this program.

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Sponsor Information


Proskauer’s Second Lien Finance Group is comprised of seasoned attorneys who focus on the second lien and junior capital markets. We represent leading lenders in the junior capital market, including second lien and mezzanine funds, hedge funds, SBICs, insurance companies, banks and private equity firms. The group’s attorneys provide practical advice that leverages our industry knowledge and formidable corporate finance, bankruptcy and restructuring expertise. Each lawyer has deep experience in insolvency and intercreditor issues that are critical to structuring second lien transactions. Our attorneys are uniquely experienced in all facets of junior lien products, including Term B, C, SCIL, second lien term loans, second lien bonds, last-out senior and senior stretch loans. Junior capital is what we do; we know the market and we bring that knowledge and expertise to every transaction.

Proskauer is one of the nation’s largest law firms, providing a wide variety of legal services to clients throughout the United States and around the world. Headquartered in New York City since 1875, the Firm also has offices in Los Angeles, Washington D.C., Boston, Boca Raton, Newark, New Orleans, and Paris. Proskauer has been distinguished by its dedication to client service, technical excellence and high integrity, and has adapted rapidly to changes in the needs of businesses, whether it be for expertise in emerging areas of law, employing new methods of communicating, or deploying the latest information technology. The Firm has a long history of providing business entities with traditional services including: Corporate Finance, Private Equity, Mergers and Acquisitions, Securities; Tax; Litigation; Real Estate, and Labor and Employment advice.