Investment Banking - Modern Metals Magazine
April 24 2015
Scott Berlin, Managing Director and Head of BGL’s Metals practice, comments on capital markets and how it impacts decision making for metal center buyers and sellers.
"The theme of his conversations with metals clients this year is the availability of debt - the ability to borrow to take dividends out instead of selling. Some clients who earlier considered selling are instead passing ownership on to the next generation.
The health of the lending market is leading to more transactions that don't lead to a change in control. The debt markets are stronger than they have ever been before. You can borrow more and the cost of capital is less. In fact, such debt instruments no longer require a personal guarantee, which for owners means less risk of losing everything.
I get five to 10 calls per month from business owners wanting to talk about capital market alternatives. So far borrowers are able to adhere to terms, paying off debt with cash flow and working to leverage back down."