Service Type: Refinancing
Client: Magness Oil Company
Client Description: Branded and unbranded fuel supplier that owns, operates, and leases 40+ c-store locations. Also owns several QSR's operated by tenants and franchisees, and fuel transportation to its own accounts and as a common carrier.
- With multiple lending relationships, constrained by “real estate only” collateral values from its lenders, the Company’s rapid growth required a larger, mid-market commercial banking relationship with an institution that could accommodate higher lending advances.
- The Company engaged Corner Capital to meet its financing objectives before a specific deadline. The Company sought the consolidation and expansion of its revolving lines of credit to optimize inventory purchasing patterns in its business model which are susceptible to price volatility. Additional financing requests made by the Company are as follows:
- Refinance over 90% of existing senior term debt to one consolidated lender, at various amortization schedules
- Secure five Letters of Credit in support of its wholesale marketer agreements
- Acquire construction financing
- Secure forward financing for rolling stock in the Company’s common carrier business
- Establish a forward facility to finance acquisitive growth opportunities
- Corner Capital analyzed all collateral and cash flows from all business segments of the Company: dealer rental income, dealer wholesale fuels, a large transportation fleet, retail operations, and QSR/franchise income streams.
- Corner Capital developed and proposed a refinancing solution consisting of a consolidated term loan primarily secured by dealer-operated facilities and c-store properties, smaller term loan collateralized by equipment and rolling stock, construction financing to support development of property, and larger consolidated working capital revolver.
- The Company’s existing debt structure consisted of 38 separate loans held by 15 different lending institutions, and the underlying goal of the refinancing was to provide the Company with a lender that believed in their growth strategy.
- Corner Capital successfully marketed and executed the proposed refinancing within the Company’s requested time frame, presenting the Company with multiple proposals, increased financing flexibility, a new banking relationship with a large institutional lender, and higher capacity for organic growth.
- The Company’s new banking relationship provided it with the ongoing opportunity to pursue acquisitive growth strategies, update its transportation fleet, and a greatly-reduced debt service load.