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| Bill Davis |
Wachovia Capital Finance, the new group formed through the union of Wachovia's asset based lending business and Congress Financial, will be looking at all ends of the credit spectrum. Bill Davis, managing director and former president and ceo of Congress Financial, said the group will handle tougher turnaround cases as well as conventional secured bank lines of credit. Congress had been a subsidiary of First Union. Since the Wachovia-First Union merger, the two asset-based businesses have been operating independently with one predominately supporting the banking business and the other, Congress Financial, focusing on turnarounds. Wachovia Capital Finance will be housed within the corporate financing group and not as a subsidiary of the bank. Based in Charlotte, Davis runs the group and reports to Wayne Robinson, managing director, who heads the capital finance group, which includes the asset based business as well as Wachovia's leasing businesses. "The combined group within Wachovia is designed to make asset-based loans to medium and large corporate clients of varying credit quality while working closely with our bank and capital market's products and services," Davis said. The combined group has in excess of $20 billion in loan commitments and more than 500 clients. Normal size deals will range from between $5 million to over $500 million. Past clients include Pep Boys and Winn-Dixie.
"The unique thing about our platform is that we will be one of a few asset-based lenders that will be positioned to do turnaround financing for a small business and will provide asset based lending for large corporate clients as well as have the capability to handle basically every asset-based lending opportunity in between," Davis said.
"Asset based lending is becoming so much more relevant for financing that we felt the Wachovia name was becoming more and more relevant in the space," Davis said of the decision to combine the two groups. He added, "The bank's asset based [business] has always done regional middle market for customers in need. By putting the businesses together, we'll have one entity at Wachovia that lends across the credit spectrum and is in a position to introduce all of our Wachovia products to our customer base."
The most visible change will be the elimination of the use of the name Congress Financial within the U.S. Congress Financial of Canada will remain a separate corporation and continue to use that name because Wachovia does not operate north of the border. The London office of Congress Financial was sold to the Bank of Ireland in January. Davis said he is not expecting any layoffs because this was not a cost initiative action.