Financing, FSMA and the Future: A Candid Conversation Between Companies and Lenders 1

Transcription

1 Financing, Food Safety Modernization Act (FSMA) and the Future: A Candid Conversation Between Companies and Lenders Topics of Conversation 1. Trends in Agribusiness Finance and the Current Agribusiness Economy 2. Food Safety Modernization Act (FSMA) and Other Hot Button Issues in Structuring Deals 3. Key Takeaways 4. Questions Panel Shane Masters Vice President AGR Partners Natalya Rivkin Vice President, Corporate Agribusiness Banking Group CoBank, ACB Breia Schleuss Co-moderator Partner Rachael D. Spiegel Co-moderator Associate Jeffrey Ware Senior Vice President, Food & Agribusiness Bank of America Merrill Lynch Lenders 1

2 Panelist Introductions Shane Masters Vice President About AGR Partners A Strategic Capital Partner AGR Partners provides strategic, flexible capital that cultivates long term growth in food and agribusinesses. AGR is a knowledgeable and nimble partner that facilitates: Late stage growth Strategic acquisitions Ownership transitions Over the past two years, AGR has invested +$175mm in six outstanding companies in the food and agriculture value chain Contact Information: Shane Masters Vice President smasters@agrpartners.com Brock Jenkins Associate bjenkins@agrpartners.com N. Church St., Suite 510, Visalia, CA W. Superior, Suite 500, Chicago, IL Panelist Introductions Natalya Rivkin Vice President, Corporate Agribusiness Banking Group Lenders 2

3 CoBank at a Glance A broad-based cooperative financial services organization serving vital industries across the rural communities of America: Agribusiness Communications Energy Water Community Facilities Over $118 billion in assets at March 31, 2016; AA- rated by both S&P and Fitch Cooperatively owned by approximately 2,400 customers Headquartered outside Denver, CO; regional offices and banking centers throughout the country Approximately 915 employees nationwide Member of the Farm Credit System, a Government Sponsored Enterprise with approximately $305 billion in assets at March 31, Panelist Introductions Jeffrey Ware Senior Vice President, Food & Agribusiness, Global Commercial Banking Bank of America Merrill Lynch in Agribusiness One of the largest providers of financial services to the Food and Agribusiness Industry sectors. Food and Agribusiness is a significant part of our Global Commercial Banking portfolio. Beef Crop Farming Vintners Dairy Farm & Processors Poultry, Pork & Seafood Packaged Foods Farm Product Processing $35.6 Billion in Total Risk Exposure As of March 31, 2016 Vertically integrated entities are included in the Packaged Foods and Farm Product Processor segments 9 Lenders 3

4 Global Footprint Full capabilities Extended reach North America Full capabilities Canada United States Latin America Full capabilities Brazil Mexico Strategic Alliance Argentina Bolivia Chile Colombia Costa Rica Ecuador El Salvador Guatemala Honduras Nicaragua Panama Paraguay Peru Uruguay Venezuela Europe, Middle East and Africa Asia Pacific Full capabilities Strategic Alliance Full capabilities Strategic Alliance Austria Belgium Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Luxemburg Netherlands Norway Poland Portugal Slovakia Spain Sweden Switzerland United Kingdom Angola Ghana Kenya Mauritius Nigeria Qatar South Africa Turkey United Arab Emirates Australia China Hong Kong India Indonesia Japan Korea Malaysia Philippines Singapore Taiwan Thailand Bangladesh Cambodia Macau New Zealand Sri Lanka Vietnam 10 Topics of Conversation 1. Trends in Agribusiness Finance and the Current Agribusiness Economy 2. Food Safety Modernization Act (FSMA) and Other Hot Button Issues in Structuring Deals 3. Key Takeaways 4. Questions Trends in Agribusiness Finance and the Current Agribusiness Economy Lenders 4

5 FSMA and Other Hot Button Issues in Structuring Deals Hot Button Issues: FSMA Primer The Food Safety Modernization Act (FSMA) enacted in 2011 Most sweeping reform of U.S. food safety laws in over 70 years In Response To: More high-profile outbreaks and recalls More imported foods More complex and far-reaching food distribution system Greater consumption of raw and minimally processed foods Hot Button Issues: Who Does FSMA Cover? Most everyone downstream from the grower, other than: Grocers/retailers Restaurants Meal/poultry/processed egg producers Includes anyone who manufacturers, processes, stores or transports food or feed products (intra/interstate) Lenders 5

6 Hot Button Issues: What Does FSMA Mean for Lenders? + Proactive v. Reactive Focus on prevention Risk-based analysis - More FDA authority Recall/Detention Registration Revocation Rulemaking/Guidance Programs + / - More requirements Inspections Recordkeeping Imports Enhanced risk management policies may lead to better inventory management and, potentially, protection of collateral Potential implications to collateral value and potential enforcement remedies Earlier warning signs of potential food/feed contamination Opportunities to assess risk ratings of customers and collateral Hot Button Issue: FSMA Implementation Rule Final Rule Published CGMPs and Preventive Controls Rule Sept. 17, 2015 Supply-Chain Program Sept. 17, 2015 Foreign Supplier Verification (FSVP) Nov. 27, 2015 Produce Safety Rule Nov. 27, 2015 Sanitary Transportation of Food April 6, 2016 FSMA and Other Hot Button Issues in Structuring Deals Lenders 6

7 Key Takeaways Questions? Shane Masters Vice President AGR Partners Natalyn Rivkin Vice President, Corporate Agribusiness Banking Group CoBank, ACB Breia Schleuss Co-moderator Partner Rachael D. Spiegel Co-moderator Associate Jeffrey Ware Senior Vice President, Food & Agribusiness Bank of America Merrill Lynch Lenders 7