Brookfield Asset Management (Brookfield) has established a C$1 billion fund with the backing of Export Development Canada (EDC) – Canada’s export credit agency, to provide debtor-in-possession (DIP) loans and other specialty finance solutions to Canadian companies undergoing a restructuring.
DIP financing is expected to provide companies seeking protection from creditors with capital to continue to operate their business while they complete a plan of reorganization. The Fund will target mid-market and larger scale opportunities where at least C$20 million of financing is required.
Brookfield has said that EDC is the largest investor with an initial participation of C$450 million that could grow to C$1 billion. Fund investors also include Canadian Imperial Bank of Commerce and Sun Life Financial. Brookfield has added that it provides 10% of the Fund’s capital and will manage the Fund, identifying and evaluating investment opportunities.
Joe Freedman, the senior managing partner responsible for the Fund at Brookfield, said: Brookfield’s history of specialty bridge lending and expertise in corporate restructuring positions us well to provide tailored solutions to support companies through the restructuring process. We believe that providing financing for companies undertaking a restructuring will help viable enterprises emerge from the current recession in a strong competitive position.
Eric Siegel, president and CEO of EDC, said: This Fund will help Canadian companies gain access to credit during restructuring, when it’s most needed. This new partnership with Brookfield enables us to further assist even more Canadian companies during the current downturn.
