Dealmaker: Nic Bustle
The Deal: Bustle, BankUnited’s senior executive vice president of corporate and commercial banking, oversaw the lender’s extension of a $40 million asset-based revolving line of credit to Miami-based wholesaler Star Computer Group Inc.
The financing closed in late September.
Details: Bustle helped Miami Lakes-based BankUnited craft a creative $40 million credit line to out-compete rival banks for the business of Star Computer, a wholesale distributor of smart phones, computers and related products in Latin America.
“It was a highly sought-after relationship, so there were a number of other banks looking at it,” Bustle said. “With their previous lender, the line was $25 million, and we were able to accommodate them with a significant increase, which they needed.”
Security pledged for the new BankUnited credit line includes the assets of Star Computer and a personal guaranty from company CEO Henry Waissmann.
“We definitely have credits significantly larger than this one,” Bustle said. “But I would say this is probably in the top quartile, so this is a significant credit for us.”
The credit line agreement is part of a larger relationship between the bank and the borrower.
“We are Star Computer’s sole bank right now,” Bustle said. “So we have all of their operating business, including the depository and treasury management and a full blown commercial banking relationship.”
Plus BankUnited is “building personal relationships with the owners in the private banking area.”
Star Computer’s $40 million credit line has a three-year term. BankUnited adjusts the interest rate quarterly. Bustle declined to disclose the initial interest rate on the new credit line, which Star Computer already has tapped to pay off the $25 million balance on its old line with the previous lender.
Banks that extend working-capital credit to companies like Star Computer face the risk of financing inventories that become outdated and lose value. Star Computer sells smart phones, computers, computer parts, audio and video equipment and accessories such as computer cables and keyboards.
“Their inventory is subject to technological obsolescence, so you do have to be careful,” Bustle said. But he had to be creative, too.
Banks often apply a single formula for calculating credit-line advances for inventory purchases by wholesale distributors. BankUnited and Star Computer agreed on different advance formulas for different types of inventory purchases.
“It can give them extra availability against certain pieces of their inventory,” Bustle said. For example, “the piece of it where they are selling smart phones into Latin America has been growing rapidly.”
BankUnited also protected itself against the risk of obsolescence on “lines of their inventory that we might feel not as strongly about,” he said. “For those pieces, we may be able to cut back our advance rates to get more comfortable in terms of the safety of the underwriting.”
CIMA Capital, a matchmaker familiar with both parties, brought BankUnited and Star Computer together this year. Star Computer “had a nice relationship with CIMA Capital, as did we,” Bustle said. CIMA provides trade-driven businesses with government-guaranteed financing for the purchase of equipment and inventory manufactured in the U.S. CIMA has offices in California, Argentina, Chile and Mexico.
“For transactions of this size, it is typical that these kinds of things often take many months or sometimes even years to develop,” Bustle said. “This one moved relatively quickly over a period of a couple of months,” and the parties’ mutual familiarity with CIMA was a big reason for the quick closing.
BankUnited also was drawn to Star Computer because it’s a seasoned company that started in 1994 and successfully diversified as the universe of high-tech products expanded.
“In its early years, like many companies here in South Florida, they were selling primarily computers and computer peripherals,” Bustle said. “They ended up in the smart phone world, and that is becoming a bigger and bigger piece of their business.”
Similar companies in South Florida sell in Latin America without setting up operations in the region. Star Computer, however, has subsidiaries in Colombia, Mexico, Panama and Argentina. “They have people on the ground there that know those markets very, very well,” Bustle said. When BankUnited was considering whether to lend to Star Computer, “that made a big difference.”
Background: Bustle, who oversees commercial banking at BankUnited, has been a South Florida banker for the last 25 years. Before joining BankUnited in 2009, Bustle worked more than 20 years for SunTrust Bank.