& Club Deals
Key Components of the Company’s Liquidity
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 clients’ 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 stakeholder 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 define 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