Debt Financing and Refinancing

The work in this area can be very wide and varies from client to client. In some cases, we negotiate with the bank alongside the client.  In others, we operate ‘behind-the-scenes’ i.e. the bank is not aware of our advisory role to the company and the company meets the banks on their own.

The full service would entail:

  • Preparation of financial projections covering term of borrowings
  • Running an initial bank credit assessment of the figures to assess their bankability
  • Preparation of bank funding proposal document
  • Powerpoint presentation to present the funding case to the bank
  • Review of term sheets relating to deals, negotiation of term sheets with banks
  • Negotiation of full documentation (bank facility negotiation) directly with banks.

In summary, Treasury Solutions can provide input into all aspects of the bank facility negotiation process and would have a significant advantage vis-à-vis other service providers by virtue of our ongoing knowledge of market norms in the area of margins, financial covenants and security as well as bank fees.

Other Services

  • Refinancing of existing debt facilities for companies
  • Negotiation of bank facilities where companies are in breach/default
  • One-off ‘health check’ review of existing facility arrangements for companies
  • Assisting corporate lawyers in identifying key commercial aspects of facilities and understanding the intricate relationships between the variables that impact financial covenants.

Case Study

The Story

Company A wished to take advantage of its strong balance sheet position by establishing bank facilities that not only facilitated the current operations but also allowed them to make bolt on acquisitions as such opportunities arose.

The main problem posed was that the company had the capacity to add on significant acquisitions which would have a very material effect on its future profitability.

As a result, the company required flexibility in the manner in which it could acquire and dispose of companies over the life of the facilities, sought to minimize the ability of the bank to veto such deals and finally sought to move away the banks conventional thinking in this area by using the ability to raise further debt based on the required profits.

Work Done

Treasury Solutions reviewed the cash flow projections prepared by the company, ensured that the resultant ratios were within acceptable ranges operated by the banks, negotiated the term sheet with the bank alongside the company, subsequently negotiated the detailed bank facility documentation alongside the company and its lawyers. We also played a significant part in structuring the mix of loans between terms loans, revolving credit facilities and overdrafts/ancillary facilities.

Project Output

The output was a robust 5 year facility which allowed the company significant flexibility in its acquisition programme and  protected the company from any slow-down in the economic environment by virtue of the strong emphasis on the quality and detail of the documentation thereby protecting the company by minimizing the ability of the bank to call in loans.

The company was also able to ensure that it had a correctly established ancillary facilities set up which dovetailed with the company’s cash management processes (cash pools) and other trade finance and hedging requirements.

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