Actionable Ideas for Companies and Sponsors

Trade Finance Solutions Can Provide Needed Liquidity to a Broad Range of Companies

Point Bonita Capital, managed by Leucadia Asset Management LLC, a division of Jefferies, has been very active in providing alternative working capital solutions to companies across various sectors. These facilities are well-suited for companies that are pressured by customers to extend payment terms, operate businesses in transition, are fully levered in their sector/industry, have already tapped into their accordions, may be witnessing rapid revenue growth, facing liquidity drain from negative working capital, or looking to avoid triggering any MFN provisions.

Point Bonita Capital attractively prices its facilities around first lien pricing levels, does not syndicate any exposure, and can fund individual facilities up to $500 million. Typically there are no restrictions on use of proceeds, and companies can opportunistically buy back a portion of their debt at a discount, pay dividends, or use funds for other corporate purposes. This group has worked with companies to help navigate the current inflationary environment and has provided ~$5 billion in funding since inception with a pipeline that remains strong.

Point Bonita Capital offers two primary forms of working capital solutions that provide steady funding in 1-yr to 3-yr facilities that can be extended.

  1. Receivables Structure – Point Bonita Capital will purchase receivables from the company and wire funds to them the same day. This is typically done via a true sale legal framework to strive to ensure the financing is not debt incurring or equity dilutive.
  2. Payables Structure – Point Bonita Capital will typically fund the company’s suppliers on Day 0, and the company will repay Point Bonita Capital on Day 90. This extension of payables can be margin accretive and reduces working capital drain. A payable facility also typically carries no maintenance covenants and is very simple to set up and service.