Who's Filling The Senior Loan Void? It's Your Friendly Regional Bank
Private equity has been dead, dead, dead in 2009, and the industry can thank the lack of available debt financing (among other things). However, some middle market firms have found regional banks willing to fill the void left by wounded senior debt providers. In recent months, debt providers like Keybanc Capital Markets, SunTrust, Fifth Third Bank, Union Bank and Tri-State Capital Bank have stepped up their efforts in providing senior loans for sponsor-backed transactions. With the traditional providers of capital, like CIT, GE Capital, and the bulge bracket banks on the sidelines. The regional lenders weren't as active in the LBO business over the past three to four years and haven't been hurt by "market excesses," so now is their time, according to lenders I spoke with. For example, Keybanc Capital Markets has launched efforts to expand its financial sponsor coverage, hiring former CIT Managing Director Thomas N. King as a managing director within its financial sponsors group
