Siena provides US$52.5m ABL facility backed by receivables, inventory and real estate

Siena Lending Group has closed a US$52.5m asset-based credit facility for a US food distributor, using assets ranging from accounts receivable and inventory to equipment and real estate to maximise the liquidity available to the business.

The committed revolving facility will refinance existing debt while providing additional working capital for growth.

The borrower has not been publicly identified. Siena describes the company as a food-service supplier to chefs, retailers and hospitality businesses that has expanded from seafood into proteins, artisan provisions and other value-added food products.

What makes the transaction more distinctive than a conventional working-capital revolver is the breadth of collateral supporting it.

Siena said the transaction allowed it to leverage the company’s entire balance sheet, specifically accounts receivable, inventory, equipment and real estate. That creates a broader collateral pool than a receivables-only or inventory-only facility and is designed to increase the amount of liquidity the borrower can access.

The facility will be used partly for refinancing and partly to support growth initiatives, including expanding the company’s product offering and responding to increased demand.

Pricing, maturity, advance rates and the allocation of borrowing capacity across the different asset classes were not disclosed.

For a food distributor, the structure has a clear working-capital rationale. Distributors can have substantial cash committed simultaneously to inventory and customer receivables, while physical assets and property may represent additional collateral that is not captured by a conventional receivables line.

Bringing those assets into one borrowing structure can potentially release more liquidity from the existing balance sheet, although actual availability will depend on Siena’s eligibility criteria, valuations, reserves and advance rates.

The transaction follows a series of sizeable ABL deals by Siena. The lender has previously financed businesses across food, media and consumer sectors using structures built around operating assets.

The latest facility is therefore less notable simply for its US$52.5m headline size than for its multi-asset structure, with four distinct collateral categories being used to support refinancing and future working-capital requirements.