CIT Northbridge Credit Provides $75 Million to Cisco Equipment Rentals
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.
- 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.
- 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
First Citizens Bank's provision of a
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.
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.
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
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
About First Citizens Bank
First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. Headquartered in
MEDIA RELATIONS:
Lexa Tutela Losey
212-461-5305
Lexa.Tutela@firstcitizens.com
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SOURCE First Citizens Bank
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