The range of available financing instruments is expanding
Why should a company issue on the debt market?
Since the 2008 financial crisis, regulatory changes have been introduced to facilitate investment by institutional investors (i.e. insurance companies, pensions, funds, etc.) in mid-sized industrial companies.
This has increased the range and diversity of debt instruments available.
Markets are now able to respond to broader financing needs in terms of deal size, maturity, and financial flexibility. Access to primary market financing sources is particularly relevant for companies with a significant amount of debt. The optimal level of disintermediation depends on several factors, including:
- the company’s credit profile
- changes in the company’s financing needs
- market trends and opportunities
Our experts have an in-depth knowledge of market dynamics, rating agencies’ methodologies, and investor preferences.
Redbridge equips CFO’s with the best tools and most relevant information to identify optimal disintermediation strategies. The team assists with:
- credit positioning strategy
- rating advisory
- presentations for agencies
- selection of investors (private placements) and/or bookrunners (public bonds)
- definition of term sheets and participation in the negotiation of legal documents
SYNDICATED LOANS & CLUB DEALS
Due to major transformations in the banking sector, companies need to redefine their refinancing strategy and reassess their banking relationships.
When should a company start thinking about refinancing its syndicated loan?
In general, a CFO should look to refinance 12 months before the contractually defined maturity date of the syndicated loan. However, there are several reasons a company may want to push this initial timeline forward, such as:
- to take advantage of favorable market conditions
- to anticipate changes in external credit ratings
- to substantially modify the terms of the existing syndicated loan, for which a simple amendment would not suffice
The refinancing timeline also depends on each CFO’s goals and constraints. When approaching banks, the negotiation strategy must be based on an in-depth analysis of existing banking relationships, market dynamics, and the company’s financing needs.
A proven track record in loan agreements
Over the last ten years, Redbridge DTA has assisted nearly 50 companies in the execution of various types of refinancing projects including syndicated loans, club deals and amend-&-extend transactions. Our approach is based on a unique methodology for structuring and negotiating loans. Each mission is customized to meet our client’s specific requirements.
Redbridge does not negotiate on behalf of its clients, but applies its benchmarking process in successive stages. Our rigorous and transparent approach gives the client total control over the process and minimizes project risk while still ensuring stakeholders’ involvement. Our approach includes:
- identifying financing and liquidity needs
- setting up a negotiation framework based on each company’s priorities
- developing a bilateral approach with each potential lender
- assessing initial offers and defining the key terms of the transaction
- negotiating the detailed terms and conditions prior to determining each bank’s role and responsibilities
- selecting participants once the terms and conditions have been validated by the credit committee
- drafting and negotiating the term sheet