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.
- 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.
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.
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.
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.
Contact us if you require more information on this topic
What Our Clients Say
We are a large company with a turnover of c.€250m. Initially we used Treasury Solutions to review our treasury policy and procedures to ensure that they were appropriate to an organisation of our size and complexity. Since then the group refunded its entire debt as part of a major acquisition and the advice we received in relation to strategy, bank covenants and facility letters was invaluable. TS have continued to support us through the current financial crisis with pragmatic and independent advice.
CFO,, Large Company
I have used Treasury Solutions since 2005 for a variety of roles - from the creation of a top class Treasury Policy that is tangible and meaningful, to a review of our treasury function from an Audit and Best Practice viewpoint, to adhoc day-to-day advice and views (on) what is happening in the re-financing market….reliable, consistent and customer-focused; they are very much a part of my decision making process.
CFO,, Large PLC and Private Company
Since the downturn, I have used Treasury Solutions as a sounding board and to watch my back in terms of banking covenants and funding strategies. At all times, I have found them to be approachable, plain speakers and experts in their area. I think … their fees could have been the best spent money that our company has spent in the last few years.
CFO,, Major Private Company
We used Treasury Solutions to assist us with the development of a foreign exchange policy. Their suggestions were practical and well communicated. They understood the subject thoroughly and we will use them again in the future should the need arise.
FC, , Private Irish Company with turnover of €160m
We are an Irish owned multinational company with a turnover in the region of €350m and 2,000 staff. Our treasury function is very complex with a large number of FX exposures and funding arrangements…Treasury Solutions has given invaluable support on a wide range of matters from strategic policy to day-to-day advice….independent, professional and thoroughly competent.
Group Finance Director,, Large Private Company
John Finn of Treasury Solutions continues to be an invaluable help to us as a small business in our long-term financial planning and in our dealings with financial institutions. In most recent times, his experience and up-to-date knowledge of the financial scene allowed us to be confident of our case in prolonged and difficult negotiations with our main banking partner. Encouraged by John’s tenacity and advice we achieved a favourable long-term result, which will allow us to get back to focusing fully on the running and developing of our business.
Ruairí & Marie-Thérèse de Blacam,, Inis Meáin Rest. & Suites