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STRUCTURED DEBT

TAILORED SOLUTIONS TO MEET YOUR NEEDS

WHAT IS STRUCTURED DEBT (SD)?

Structured debt typically refers to a mix of different financial debt products which are designed to sit alongside one another to cover the total amount of funds needed. The overarching goal with structured debt is to supply the capital to aid business growth.  Structured debt also offers great benefits for businesses such as royalty repayment methods and restructuring plans that accelerate profits and growth.

This type of business finance is used to help inject substantial amounts of capital into larger or more complex businesses, structured debt is often a funding option used by SMEs which are looking to scale their growth plans, develop new product lines, refinance existing debt, acquire other SMEs or restructure shareholding.  

KEY TAKEAWAYS

  • Structured finance is a financial instrument available to companies with complex financing needs, which cannot be ordinarily solved with conventional financing.

  • Traditional lenders do not generally offer structured financing.

  • Structured financial products, such as collateralized debt obligations, are non-transferable.

  • Structured finance is being used to manage risk and develop financial markets for complex emerging markets.

Understanding Structured Debt
 

Structured finance is typically indicated for borrowers—mostly extensive corporations—who have highly specified needs that a simple loan or another conventional financial instrument will not satisfy. In most cases, structured finance involves one or several discretionary transactions to be completed; as a result, evolved and often risky instruments must be implemented.

OUR DEBT INSTRUMENTS SOLUTIONS

 

Restructuring

Restructuring is an action taken by a company to significantly modify the financial and operational aspects of the company, usually when the business is facing financial pressures.

 

Restructuring is a type of corporate action taken that involves significantly modifying the debt, operations, or structure of a company as a way of limiting financial harm and improving the business.

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Acquisition Financing

Acquisition financing is the capital that is obtained for the purpose of buying another business.

 

Acquisition financing allows users to meet their current acquisition aspirations by providing immediate resources that can be applied to the transaction.

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Leverage Buy-Out

A leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition.

 

The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company.

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Management Buy-Out

A management buyout (MBO) is a transaction where a company’s management team purchases the assets and operations of the business they manage.

 

A management buyout is appealing to professional managers because of the greater potential rewards and control from being owners of the business rather than employees.

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Management Buy-In

A management buy-in (MBI) is a corporate action in which an outside manager or management team purchases a controlling ownership stake in an outside company and replaces its existing management team.

 

This type of action can occur when a company appears to be undervalued, poorly managed, or requires succession.

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Structured Finance

Structured finance is a heavily involved financial instrument presented to large financial institutions or companies with complicated financing needs who are unsatisfied with conventional financial products.

 

Since the mid-1980s, structured finance has become popular in the finance industry. Collateralized debt obligations (CDOs), synthetic financial instruments, collateralized bond obligations (CBOs), and syndicated loans are examples of structured finance instruments.

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Syndicated Lending

A syndicated loan, also known as a syndicated bank facility, is financing offered by a group of lenders—referred to as a syndicate—who work together to provide funds for a single borrower.

 

The borrower can be a corporation, a large project, or a sovereign government. The loan can involve a fixed amount of funds, a credit line, or a combination of the two.

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Trade Finance

Trade finance represents the financial instruments and products that are used by companies to facilitate international trade and commerce.

 

Trade finance makes it possible and easier for importers and exporters to transact business through trade. Trade finance is an umbrella term meaning it covers many financial products that banks and companies utilize to make trade transactions feasible.

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Export Credit Agency

An export credit agency offers trade finance and other services to facilitate domestic companies' international exports. Most countries have ECAs that provide loans, loan guarantees and insurance to help eliminate the uncertainty of exporting to other countries.

 

The purpose of ECAs is to support the domestic economy and employment by helping companies find overseas markets for their products. ECAs can be government agencies, quasi-governmental agencies or even private organizations—including the arms of commercial financial institutions.

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