CIT Northbridge Credit Provides $75 Million to Cisco Equipment Rentals

Rhea-AI Summary

First Citizens Bank announced that CIT Northbridge Credit, guided by First Citizens Institutional Asset Management, provided a $75 million revolving credit facility to Cisco Equipment Rentals.

This Texas-based company specializes in equipment rentals, new and used sales, parts, and service. The credit facility will refinance and consolidate existing loans, supporting their growth-oriented business plan and restructuring efforts.

The financing aims to help Cisco diversity into new markets and sectors across Texas. Both companies expressed mutual satisfaction and optimism about the strategic collaboration and its impact on Cisco's market position.

Positive

• CIT Northbridge Credit provided a $75 million revolving credit facility to Cisco Equipment Rentals.
• The credit will refinance and consolidate multiple lending facilities, facilitating Cisco's business growth and restructuring.
• CIT Northbridge Credit and First Citizens Institutional Asset Management have shown strong commitment and expertise in supporting Cisco's business goals.
• The facility offers Cisco significant managerial and operational flexibility.
• The financing aids Cisco's efforts to diversify sectors and enter new markets across Texas.

Negative

• The need for refinancing and consolidation suggests existing financial strain or suboptimal loan arrangements at Cisco Equipment Rentals.
• The complex restructuring and recapitalization might indicate underlying financial instability.
• Consolidating multiple existing loans into one facility may increase dependency on a single lender.

Insights

Financial Analyst

First Citizens Bank's provision of a $75 million revolving credit facility to Cisco Equipment Rentals is a significant move for both parties. For Cisco Equipment Rentals, this credit facility provides an opportunity to refinance and consolidate existing debts, which can streamline their financial structure and potentially reduce interest costs. This is advantageous as it allows the company to focus on its growth strategy without being bogged down by complicated lending structures. In the context of financial health, consolidating multiple lending facilities can improve liquidity and provide greater flexibility in cash management.

For First Citizens Bank, this deal reinforces its position as a key player in asset-based lending. Asset-based lending involves providing loans secured by company assets, such as inventory or receivables, which can be a safer bet compared to unsecured lending. The interest rates for such loans are typically higher, reflecting the risk and the specialized nature of the credit facility. It is important to note that Cisco's successful restructuring and recapitalization efforts, mentioned in the announcement, indicate positive management actions addressing previous financial complexities. Investors should see this as a sign of proactive management and potentially improved financial stability.

The flexibility provided by this facility could enable Cisco to explore new markets and diversify its services, both of which are beneficial for long-term growth. However, investors should keep an eye on how effectively Cisco uses this credit to actualize these growth plans.

Market Research Analyst

Cisco Equipment Rentals is based in Texas, a region known for its robust construction and energy sectors, which are primary markets for heavy equipment rental and sales. This new credit facility could enable Cisco to capitalize on expanding opportunities in these sectors. By refinancing existing debts and consolidating their financial obligations, Cisco is positioning itself to be more agile and responsive to market demands.

Moreover, the announcement highlights Cisco's intention to enter new markets and diversify sectors. Market diversification is a strategic approach to mitigate risk by not being overly dependent on a single sector or market. It also opens up multiple revenue streams, which can be particularly beneficial during economic downturns. However, entering new markets involves costs and risks, including market research, compliance with local regulations and potential competition. Investors should monitor Cisco's market entry strategies and their success in capturing market share in new regions.

NEW YORK, May 30, 2024 /PRNewswire/ -- First Citizens Bank today announced that CIT Northbridge Credit, as advised by First Citizens Institutional Asset Management, LLC, provided a $75 million revolving credit facility to Cisco Equipment Rentals, a Texas-based provider of equipment rentals, new and used equipment sales, parts and service. 

The revolver was used to refinance and consolidate multiple existing lending facilities supporting a growth-oriented business plan and in conjunction with a complex restructuring and recapitalization of the balance sheet.

"We appreciate the diligence and expertise provided by the CIT Northbridge Credit team in arranging this credit facility," said Randy Agee, interim CEO at Cisco Equipment Rentals. "They learned our business structure and objectives by collaboratively working with key Cisco team members, were available to walk the team through questions, and combined First Citizens' asset management expertise with Cisco's vision and needs to deliver a financing package that will excel Cisco's rental business forward."

"We're pleased to provide this financing to Cisco Equipment Rentals as they continue to diversify sectors and enter new markets across Texas," said Neal Legan, who leads the team that advises CIT Northbridge Credit. "The new facility provides management and ownership significant flexibility to strengthen Cisco Equipment Rentals' market position, and we look forward to supporting their business plans going forward."

CIT Northbridge Credit is a trusted financial partner supporting middle-market companies with a broad range of flexible asset-based debt solutions. A joint venture advised by First Citizens Institutional Asset Management, it provides revolving and term loan commitments from $15 million to $150 million to companies across various industries and business cycles, and serves primarily as sole lender, agent, club participant or co-lender.

About First Citizens Bank
First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. Headquartered in Raleigh, N.C., First Citizens has built a unique legacy of strength, stability and long-term thinking that has spanned generations. First Citizens offers an array of general banking services including a network of more than 500 branches and offices in 30 states; commercial banking expertise delivering best-in-class lending, leasing and other financial services coast to coast; innovation banking serving businesses at every stage; and a nationwide direct bank. Parent company First Citizens BancShares, Inc. (NASDAQ: FCNCA) is a top 20 U.S. financial institution with more than $200 billion in assets. First Citizens Bank, Member FDIC. Discover more at firstcitizens.com.

MEDIA RELATIONS:
Lexa Tutela Losey
212-461-5305
Lexa.Tutela@firstcitizens.com

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SOURCE First Citizens Bank

FAQ

What is the value of the credit facility provided to Cisco Equipment Rentals by CIT Northbridge Credit?

CIT Northbridge Credit provided a $75 million revolving credit facility to Cisco Equipment Rentals.

What will Cisco Equipment Rentals use the $75 million credit facility for?

The credit facility will be used to refinance and consolidate multiple existing lending facilities, supporting a growth-oriented business plan and restructuring.

How will the new credit facility impact Cisco Equipment Rentals?

The facility will provide Cisco significant flexibility to strengthen its market position and diversify into new sectors and markets across Texas.

Who advised on the $75 million credit facility to Cisco Equipment Rentals?

The credit facility was advised by First Citizens Institutional Asset Management,

What is the purpose of CIT Northbridge Credit's involvement with Cisco Equipment Rentals?

CIT Northbridge Credit aims to support Cisco Equipment Rentals' growth, diversification, and market expansion through the provided credit facility.