SR Alternative Credit, formerly Old Hill Partners, provided $10 million in the form of a senior secured one-year term loan to a company that acquires and leases standard 20- and 40-foot shipping containers, among other transportation equipment. This is the third transaction for SRAC with this borrower. The company’s lessees include shippers with trade routes primarily in Southeast Asia and other regional routes. Security for the loan consists of the new containers, the leases, receivables from the leases, assignment of the management agreements, a lockbox for manager payments, a stock pledge of the borrower and guarantees.

“The owner-lessor in our deal has acquired containers and leased them under long-term leases. Their lessees operating within the Southeast Asia markets face less volatility than in the global market. We believe that container price and lease rate declines will be leveling out in the coming year, but we have advanced cautiously as this market recovers. With that in mind, this is an opportune time to finance seasoned container owners with creditworthy lessees,” said Sam Adams, portfolio manager at SRAC. “We worked closely with the borrower and its parent company, which has extensive experience in container acquisition and leasing, to craft a transaction that capitalized on the opportunity while building-in collateral and cash flow safeguards, such as LTV triggers and lease payment reserves, to mitigate risk. We continue to explore opportunities in this sector and in transport finance generally.”

SRAC joined the Spouting Rock Asset Management platform in January 2022 and provides asset-based lending solutions for borrowers seeking $10 to $50 million in financing. The firm structures senior secured debt in the form of term, drawdown and revolving-to-term facilities of up to four years and loan-to-value ratios in the range of 35% to 85%. Collateral types include pools of loans or leases (specialty finance), receivables, inventory, machinery and equipment.