Whether you require capital to expand your existing operations or acquire additional business we are able to advise you on the best ways to do so and prepare documents and walk you through the process of acquiring additional financing. In particular, our specialism is assistance with the issuance of Eurobonds. Such issuance will allow you to offer to your investors freely tradeable instruments, recognised by financial institutions worldwide.
Frequently asked questions
- Why would I or my company rely on debt financing?
If a company needs capital there may be a couple of ways to raise such, one of them would be debt financing (the most typical of which would be a bank loan). Some of the main advantages of debt financing are:
a) maintaining ownership – as a general rule the lender would have no control in the company, thereby, the company is free to continue running its business without interruptions;
b) tax deductions – generally, the principal and interest may be classified as business expenses and therefore, can be deducted from the income when calculating the taxable base.
Another type of debt financing is via the issuance of bonds, which are essentially certificates to prove that the investor lent the money to the company.
- What documents would I need to present and disclose to issue bonds?
Issuing bonds through Euroclear (i.e., such bonds that can be easily tradeable through any broker and onto any account) requires the involvement of a number of financial institutions. Thereby, it is necessary to provide full due diligence information on the issuing company, its management and its ownership. The information on the beneficial owners to be disclosed would also have to include the information on the source of funds of such owners.
Furthermore, it would be necessary to disclose the business plan of the issuing entity to support the company’s claims as to the use of funds raised. Where the bonds issued are secured then it would also be necessary to provide the documentation confirming such security and your ownership of such security.
- Do I need to provide collateral to secure the issue of bonds?
The question of whether to issue secured or unsecured bonds depends on the type of investor you are seeking to attract. Certain investors may be more confident in the company and therefore require less security. However, it is worth keeping in mind that as a general rule the investors would want to see some type of security for their investment.
- When should I contact you if I want to raise debt for my company?
The earlier in the process you contact us the more comprehensive advice we will be able to provide, not only on the issuance itself but on the corporate structure (and possibly re-structuring) that may make the due diligence process easier and therefore quicker – this is due to our extensive experience in those types of transactions and knowledge as to what the paying agents (banks) are looking for in the issuing entity.
- How long does the process of bond issuance take?
The process would depend on the speed with which you are able to provide due diligence and respond to various queries posed by the bank. Additionally, various other factors can play a role in the time it takes for the issuance to be completed, in particular, the speed of communication on the part of banks and their solicitors. However, as a general rule the issuance takes approximately 1 – 3 months.
- What are the costs associated with the issuance of bonds?
Our fees are £50,000 regardless of the time spent on the matter and including all the preliminary structuring and due diligence advice. The overall issuance costs will be in the area of £150,000-£200,000 depending on various factors and each individual situation.
- Is there a minimum amount of financing that I can raise through the issuance of bonds?
No, however, the associated costs would make the issuance of less than £10mln impractical.
- What is the difference between the services you offer and those offered by investment banks?
We combine expertise on various subjects (including due diligence, bank account opening, issuance of bonds, listing) within the small team of professionals, which enables us to offer the most comprehensive advice within the shortest amount of time. Additionally, we can help raise the smallest amount via the issuance of bonds, at the same time, as a general rule, private banks will put a cap as to the amount of issuance they would consider, if you were to approach such bank individually.