CFSD Group LLC was formed in 2009 to advise utility companies on complementary financing paths. Recognizing that traditional capital markets have been permanently altered by the financial crisis of 2009 and the coronavirus crisis of 2020, both of which seized the commercial paper markets, the firm provides a strategy for adding a complementary source of capital with competitive costs and increased liquidity.
CFSD believes that competitive bank financing is available through regional and local banking syndicates. The relationships established in such financings can play a solid and important role to the back-up facilities provided by the global money center banks.
Our utility clients and their stakeholders benefit from an additional diversified and cost-effective source of financing complementary to money center back-up facilities, and from community, government, and local regulatory goodwill. Additionally, they benefit from job creation and an improved local economy resulting from financial capital remaining in the community.
Participating banks also accrue significant benefits by putting an investment grade loan into the local bank portfolio which raises the Federal Reserve score of quality of the portfolio and allows the local banks to loan more of their resources to local borrowers. The higher Federal Reserve grade of the loan portfolio increases standing in the financial community, creates opportunities to participate in further syndications, and provides an enhanced visibility and goodwill in the local community.
Our clients choose us based on our depth of experience and our proven ability to close transactions. Our partners have decades of experience in financial services, utilities regulation, and the utilities industry. We leverage this experience by facilitating syndication opportunities between utility companies and regional and local banks.
CFSD Group LLC clients have now closed seventeen significant financings aggregating over $1.3 billion. All of these transactions have been oversubscribed at market prices and closed on schedule. The average oversubscription has been 61%. Eleven regional and 125 local banks have participated in these financings.
Regional and local bank syndications provide a risk management tool based upon a diversified and cost-effective local financing complementary to, but not dependent upon, LIBOR- or SOFR-based wholesale funding or the volatile, riskier commercial paper market.
“We borrow from Main Street”
Can your utility make this statement? In the current economy, borrowing from local and regional banks can have a significant and constructive impact on the local community, and can be viewed positively by political and regulatory constituencies.
Please contact any of the CFSD Group partners to discuss this powerful financing concept further. It would be our pleasure to assist you with a complementary funding transaction.