As a non-bank specialty finance company, EPC is not subject to leveraged lending guidelines. We are less sensitive to the total leverage ratio of a given borrower and whether a direct lender’s term loan is structured as covenant-lite.
We can take a portion of first-out term loan at a compressed yield in order to enhance the direct lender’s yield on its last-out position.
If necessary on a given transaction, the direct lender may purchase our first-out position at par plus accrued interest (no prepayment penalty) on short notice.
We seek to provide a “read” on any given opportunity within 48 hours and move rapidly through approval and documentation. We have designed our process to be consistent and predictable. We believe strongly that a first-out lender should not be the bottleneck in regards to a transaction closing. Most of our team members have worked together for many years at other major financial institutions and are accustomed to delivering within tight timeframes.
Our objective is to establish programmatic arrangements with direct lenders and sponsors by negotiating a master Agreement Among Lenders once and then using the same form for each subsequent transaction.
We take on the contingent funding obligation and the operations headache associated with the revolver while the direct lender can focus on deploying fully-funded term loans.
We can commit up to $50mm on a single transaction, which enables us to scale our first-out facilities over time as a given borrower grows and eliminates the need for a first-out partner on most opportunities.
We have structured the platform so that we can take a patient buy-and-hold approach that is less impacted by regulatory changes or disruption in the broader capital markets.