Hartford Business Journal

10 HARTFORDBUSINESS.COM | MARCH 24, 2025 Law firm Shipman & Goodwin recently added four attorneys to its finance practice group, including (from left): Jonathan Orell (partner), Michael Horowitz, Kyle Buchoff and W. Graham Garrett. CONTRIBUTED PHOTOS | SHIPMAN & GOODWIN Expanding The Bench Law firms beef up finance practices amid expected increase in deal flow, more complex transactions the holding company for Webster Bank, formed a private credit joint venture with Marathon Asset Management, based in New York. The venture is aimed at providing lending to private-equity sponsored, middle-market companies. "This joint venture allows Webster to better serve and support our clientele, while at the same time diversifying our revenue and realizing a greater portion of our sponsor franchise's capabili- ties," CEO John Ciulla said at the time. The change should be kept in perspective. Investment-grade bond and bank loan markets remain the dominant sources of capital across the U.S., but private credit has approx- imately doubled in size over the past five years to $1.25 trillion. Private equity investment has been particularly active in Connecticut, with deals touching various indus- tries from manufacturing (Barnes Group and Kaman) and insurance, to electrical contractors (Professional Electrical Contractors of Connecticut) and accounting and human resource firms (CohnReznick and Total Team Solutions). While private credit transactions bring more risk, Shipman's Gerard also confirms that many businesses in need of credit are becoming more comfortable with novel institutions and deal structures. For instance, he says a develop- ment group is currently negotiating a private credit deal to finance a major mixed-use development in Greater Hartford that had experienced delays because of the lending environment. "Private credit last year, and private equity, filled a huge void in loan demand, where banks were not able to fill," Gerard said. "We've seen large transactions in Connecticut that private lenders came in and kept some projects going that would not have been able to get started or continue." By Harriet Jones hjones@hartfordbusiness.com L aw firms are staffing up in anticipation of banks and other financial institutions experiencing increased demand for loans and other forms of credit this year, including novel transactions involving non-bank lenders. It follows a fall off in lending in recent years in a high interest rate environment. "Based on history and last year and what we're hearing from the commu- nity banks, they're anticipating more loan volume this year than they did in prior years," said Scott M. Gerard, the co-chair of Shipman & Good- win's finance depart- ment. "A lot of banks were on pause for good reason, and let's face it, banks need to make loans to survive and make money." Most forecasts are calling for increased lending across sectors throughout 2025, and there were early indications that small business lending was starting to experience a recovery at the end of last year. Shipman is one of the firms that's hiring in anticipation of this greater deal flow, taking on four new attor- neys in Gerard's department. Jonathan Orell joins the firm as a partner, bringing experience in complex finance and real estate trans- actions. W. Graham Garrett special- izes in sophisticated real estate financing as well as representing major financial institutions and other lenders in financing transactions. Meanwhile, Kyle Buchoff and Michael Horowitz join Shipman's corporate trust practice, representing banks and other financial institutions as administrative agents, trustees and collateral agents for secured and unse- cured capital market transactions. Marie C. Pollio, Gerard's co-chair in the department, specializes in capital markets and public bond debt. "We have a very high- volume practice and we wanted to expand our bench, but also our depth, in that what we're seeing are crossover trans- actions that are debt securities, but function more like a loan," she said. "So, we like the fact that (Buchoff and Horowitz) have experience in the loan setting and can bring that experience to bear on these kinds of hybrid trans- actions that we're seeing more of." Pollio, too, is seeing an increased appetite for lending as interest rates have eased, and particularly because there could be a need for refinancing. "In the COVID years of 2020 to 2021, borrowing was very cheap," she said. "There was just an incredibly high volume of bond issuances and loan transactions, and a lot of those are approaching maturity, and so there's a lot of refinancing activity that's happening." Shipman isn't the only firm beefing up its finance practice. Other major national and interna- tional law firms — including Mayer Brown and Kirkland & Ellis, both head- quartered in Chicago; California-based Gibson, Dunn & Crutcher; Akin Gump Strauss Hauer & Feld; and Proskauer Rose, among others — over the past year have hired additional lawyers in the space, particularly to compete for work in the private credit markets, Reuters recently reported. Other firms have formalized private credit practices. Lenient terms That refinancing pressure goes hand-in-hand with more creative approaches, facilitated by novel institu- tions and deal structures. Variable rate instruments are gaining in popularity, according to Pollio, as is access to private credit markets, where investors have fewer restrictions than a bank might, and can take on riskier deals. "The investing funds are partici- pating as a bank would have, with the different regulations those funds have overlaying them — or perhaps none — and just different investment goals," she said. The light regulatory environment for private credit means borrowers can access lenient terms for loan- to-value ratios and debt service coverage. This type of flexibility is also garnering interest among more traditional lenders. Last year Stamford-based regional lender Webster Financial Corp., U.S. CORPORATE CREDIT MARKET BY SIZE MARKET PRIVATE CREDIT MARKET $1.25T PUBLIC LEVERAGED CREDIT $2.76T INVESTMENT GRADE BONDS $9.08T U.S. BANK LOANS $11.4T Source: Pitchbook, BofAML, Bloomberg Finance, L.P., U.S. Federal Reserve, as of June 30, 2024. Marie C. Pollio Scott M. Gerard

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