Dominion, Household Forming Commercial Unit
Gold, Jacqueline S., American Banker
PROSPECT HEIGHTS, Ill. - Dominion Resources Inc. and Household International Inc. said their commercial financial services subsidiaries have signed a letter of intent to create a national commercial lending company.
Financed with $75 million from each company and a $600 million asset base from Household's liquidating commercial loan portfolio, the yet-unnamed venture will specialize in lending to middle-market companies.
The operation, to be headquartered in the Chicago area and managed on a day-to-day basis by 45 Household employees, will provide financing for buyouts, expansions, refinancings, and recapitalizations. The new company will also provide senior and subordinated debt to public and private businesses.
The new unit will not make commercial real estate loans, according to Robert Hartney, a Household spokesman.
Household, which has $1.3 billion in its commercial portfolio slated for liquidation, says it win stay in the middle-market lending business, but only to provide high-quality, senior secured debt. according to David P. Killion, president of the corporate finance division of Household Commercial Financial Services. …