Debt Advisory

Debt advisory is advisory work around raising and structuring financing. Advisors help find the right structure, approach lenders, and negotiate terms. The goal is financing that fits the company and the specific project. The process resembles a sale: first the financing structure is developed in terms of size, ranking, tenor and amortisation profile, then a lender presentation is prepared, a group of potential financiers is approached in parallel, and finally the offers received are compared and renegotiated.

The comparison covers not only the margin but also arrangement and commitment fees, security requirements, amortisation, covenants, consent rights and prepayment terms, because together these cost more operating freedom than a difference of a few basis points in the interest rate. The market has broadened: alongside relationship and syndicate banks there are credit funds offering unitranche facilities, mezzanine providers, promotional banks and arrangers of Schuldschein loans, and making that variety visible and comparable is a core part of the service. Typical occasions are acquisition financings, refinancings of maturing debt, growth and investment projects, dividend recapitalisations and restructurings. Compensation usually combines a retainer with a success fee on the volume arranged. An independent debt adviser differs from a lender because the adviser is not filling its own loan book and can therefore recommend the structure that suits the company rather than the lender.

Sequencing matters in practice, because financing can only be negotiated credibly once the business plan and adjusted earnings are settled. Going to market too early produces non-binding indications that are later revised downwards. The scope of the lender presentation also deserves attention, since banks and credit funds need different information. For existing companies the most common mistake is approaching a refinancing only shortly before maturity and therefore negotiating without an alternative.