Refinancing
What is it?
- It is the process of prepaying an existing debt by raising new debt, ideally at terms that are more suitable to the current situation of the company. Debt refinancing may involve changing the financing source and/or using a different financing product.
- Refinancing occurs when the terms of a current loan, whether it be the interest rate, payment schedule, or others, are revised.
What to expect?
- Not all loans can be refinanced. Existing loan documents should be reviewed to determine which loans can be prepaid.
- The company should have a detailed financial projections that identifies the timing and amount of future cash flow needs to not only assess funding requirements but also determine the type of financing that will best support the needs of the company.
- The better a company’s financial situation, the more the lenders will be more aggressive and more willing to lend to the company. Credit metrics such as D/E and D/EBITDA helps assess a company’s financial situation and determine what financing alternatives are available.
Who should consider
- Companies who are looking to revise their existing loans due to a decrease in interest rates.
- Companies whose credit rating has improved due to changes in their long-term financial plan as well as a strategy for them to pay off their outstanding debts by lumping them into a single loan.
How Can Bayfront Help
Strategy Review
Detailed analysis of the Client and advise on value-adding corporate strategies.
Structuring
Detailed analysis of the Client’s capital structure and advise on the optimal proportion of equity and debt.
Deal Execution Management
Assisting in execution of deal processes, most commonly in the form of capital raising.
Information Memorandum
For presenting to different target audience such as lenders, new sales relationships, new client relationships.
Governance Review
To determine the specific governance needs of a company and assist in areas which would minimize risks and help achieve business goals.