NCB Secures New Credit Facility for Portfolio Acquisitions and Establishes ESOP
insideARM.com February 5,2015
NCB Management Services, Inc., a privately held national debt buyer and collection agency, has secured a new senior credit facility from a four-bank syndicate led by Santander Bank, N.A. The facility, with a pre-approved accordion feature, provides a total borrowing capacity of nearly $100M.
A portion of the proceeds from the facility helped fund the establishment of NCB’s Employee Stock Ownership Plan (ESOP). The ESOP acquired a minority interest in the Company for the benefit of its employees. Although control of the company remains with the founding shareholders, the future value of the company will now be shared with all participating employees.
Marcelo A. Aita, President & CEO of NCB Management Services, Inc., commented on the recent transaction, saying: “This is a very significant development in NCB’s long and proud history. Not only does the new credit facility continue to give us low-cost bank financing, but it allowed us to establish a retirement plan for our employees that is truly second to none.” When asked to elaborate on why he felt the plan was second to none, Mr. Aita explained: “Many companies say their employees are highly valued, but we put those words into action by sharing the benefits of ownership with them. Not only did we focus on making participation eligibility easy to achieve, but we also gave our employees credit for past years of service.”
The effects of an ESOP on productivity, compliance, employee retention, and profitability can be very significant. Following three consecutive years of record results, NCB believes that their new structure will facilitate a continuation of that trend for the foreseeable future. The team of professionals that helped make the recent transaction possible included CSG Partners, Argent Trust Company, Stout Risius Ross, Inc., Pepper Hamilton LLP, Ballard Spahr LLP, and Moore & Van Allen PLLC.
NCB has invested more than $100M in portfolio acquisitions and acquired close to $2B in unsecured consumer receivables both direct from creditors as well as other debt buyers. “We made the decision a few years back that NCB was going to continue investing in response to the demanding regulatory environment,” Ralph Liberio, Chief Operating Officer said, “We believe that critical mass is needed to make the necessary investments in both collections and compliance to be successful in this market. We have completed transactions that allow other debt buyers to accelerate their return of capital, deleverage their balance sheet, and redeploy their proceeds.”
NCB continues to look at both non-performing and semi-performing portfolios of unsecured consumer debt such as credit cards, personal loans, and auto deficiencies. For portfolios that include payers they pay a good premium on multiple of monthly cashflow and in some cases enter into a transitional service agreement to allow the seller to continue servicing the accounts for a period of time. They have more than 20 years of experience buying and servicing these types of debt and want to continue leveraging their new financial and operational capacity. If you have a portfolio that you may consider selling, reach out to one of the executives at NCB and start an exploratory conversation today.
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