Cerberus employed its real estate expertise and extensive capital resources to provide a well-established building materials retailer with much needed liquidity.
With nearly 300 retail locations in 36 states, the company was the largest private supplier of building materials in the U.S. Faced with a deeply challenged construction industry and faltering national economy, however, the building supply company required a short-term capital infusion to ensure its continued operations.
Cerberus’s multi-disciplined expertise allowed the Firm to assess the investment’s risks quickly and create a highly effective financing structure that utilized the underlying real estate of the company. The Firm underwrote a $195 million senior term loan, $70 million of which was retained by Cerberus. Almost two years later, the facility was amended to include an incremental $16.5 million advance and a release of $3.5 million of loan reserves to the borrower.
With the benefit of Cerberus’s financial and real estate experience, the company in 2010 was able to reduce its facility revolver by 20%, improving its liquidity position and placing the retailer in a position to manage its operations successfully. The loan was paid in full in early 2011.