CYA, Uh, Cover Your Assets - ABL Deals In Demand.

Publication: High Yield Report

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COPYRIGHT 2008 SourceMedia, Inc.

Byline: Richard Kellerhals

While some loans may be senior secured, asset-based loans are not only senior secured, but are also guaranteed and carry a lifetime warranty against defaults. The number of these types of loans-secured by a company's assets, such as its inventory, receivables, machinery or other equipment-is growing as investors seek safe bets in uncertain times.

Asset-based lending has been steady over the past several years, but surged in the past quarter. From the first quarter of 2004 to the first quarter of 2008, the quarterly volume of asset-based lending averaged around $16 billion every quarter, according to Reuters Loan Pricing Corp./DealScan. Over the second quarter of 2008, the volume passed $20 billion. Market participants say that trend...

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