The Company: A German-based manufacturer of automotive and office component parts with locations in the U.S., Mexico, Japan, Australia, and China.
The Challenge: The U.S. insurance program was historically written with a large deductible that required Letters of Credit that totaled almost $1,000,000. The collateral tied up much needed borrowing capacity that was critical to the private equity firm's financial model.
The Equity Risk Partners Global Solution: The U.S. Equity Risk Partners Global broker was able to eliminate most of the collateral within the six months post-close. This was challenging given that the Equity Risk Partners Global broker started negotiations with the carriers post-close and until then was not privy to the carrier's rationale for maintaining the collateral. The remaining collateral was systematically released over the subsequent 24 months.
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