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Capital and banking solutions custom cut for metals

Aug 03, 2017 | 08:00 PM | Bill Beck

Financial Services Provider of the Year » BMO Harris Bank N.A.

A world-class reputation for working with industry clients up and down the metals supply chain and the will and wherewithal to keep building on that foundation have earned BMO Harris Bank N.A. AMM’s 2017 Steel Excellence Award for Financial Services Provider of the Year for the second time in a row.

“Recognition by AMM with this award proves our commitment to provide financial services to the global metals industry,” Andrew Pappas, managing director, who also leads the metals sector within the Asset-Based Lending Group of BMO Harris Bank, commented on the repeat honor. “Creativity and customization of services and products helped BMO Harris Bank earn the AMM Award for Steel Excellence for the past two years,” he said.

Pappas leads a team of nine individuals focused on sourcing, structuring, negotiating, closing and managing senior secured credit facilities as part of a corporate finance solution, primarily for metals and industrial companies throughout the United States. The team is responsible for more than 50 accounts and $2 billion in commitments.

BMO Harris is a subsidiary of BMO Financial Group, the eighth largest North American financial institution with about $650 billion in assets. The bank has been a long-standing capital provider to the metals industry, including steel mills, metal service centers, metal distributors and fabricators, scrap metal recyclers, and specialty metals companies.

BMO Harris determined early on that a specific Metals group would have to be established within the Commercial Bank and Investment Bank in order to provide personal and direct service, and to build the expertise needed within the teams. That determination led to the creation of an ABL Metals Group, a Cash Flow Metals Group, and a Metals Investment Bank covering larger companies and housed within BMO Capital Markets.

BMO provides Commercial Banking—asset-based and cash flow facilities—services for companies of all sizes.  It provides Senior Credit Facilities ranging from $10 million to $1 billion to support acquisitions, leveraged buyouts, recapitalizations, refinancing, turnarounds, and seasonal or growth working capital requirements.

“An experienced lender can be instrumental in providing the capital and services to help grow their clients’ businesses,” Pappas pointed out. “And I believe BMO has excelled with assisting our metals clients, which has helped us expand our presence in the metals industry.

“While many financial institutions are reluctant to invest in the metals sector due to its volatility, we at BMO Harris have embraced, invested, and expanded our market share over the past few years.” Pappas noted. During his 25-year banking career, Pappas has been responsible for sourcing and funding more than $5 billion in commitments

Recent work within the metals sector has allowed BMO Harris to showcase its creative and customized solutions to help companies exit from bankruptcy, create more liquidity by improving on the terms of their senior credit facilities, help finance consolidations in the metals sector, and provide financing for import/export companies. BMO has also worked with companies to provide additional availability and liquidity under a working capital line/revolver or term loan/capital expenditures facility, while providing additional flexibility in the overall structure to assist companies during the cyclical ups and downs in the metals industry.

The bank’s varied offerings and deep insight into the metals sector has allowed BMO Harris to provide timely and innovative solutions to metals companies including steel producers, service centers, distributors, fabricators and scrap metal service companies.  Some of the bank’s recent successes with its clients include:

• Providing exit financing to a steel producer and saving jobs for a long-standing metals company.
• Lending on either the assets or cash flows of the company, depending on the company’s profile.
• Providing additional liquidity/availability (lending on unconventional assets and providing higher advance rates on assets).
• Offering more flexibility (i.e. financial covenants and reporting purposes) to operate in a more dynamic environment.
• Increasing the bank’s senior credit facility and hold size to support clients’ growth while helping to consolidate or reduce the number of existing lenders in the bank group.
• Providing counsel on mergers and acquisitions financing needs.
• Offering a Treasury Management Solution that supports customer’s activities.
• Providing Trade Finance and financing solutions for importers of metal.
• Providing all of a company’s banking needs.
• Working closely with metals companies during cyclical downturns and provide financing solutions for cyclical upturns.

“BMO Harris works with each client to provide the appropriate debt structures to meet their needs which in many cases, has resulted in additional liquidity/availability, flexibility, as well as other product solutions and services that have allowed client management to focus on their business,” Pappas summarized.  “In short, BMO has significant experience in lending in the metals sector and we’ve tailored our capital and bank services to meet the unique needs of the metals industry and our valued clients.”