How to optimise your financial structure

Bonds and syndicated loans can meet your finance needs

How to optimise your financial structure

Bonds and syndicated loans can meet your finance needs

Are you looking to expand your business activities,finance new activities or refinance your existing credit facilities? If so, there are various ways of meeting your financing needs, such as bonds and syndicated loans. Find out all about it here, so that you know what to do to keep the financial structure of your business healthy.

Bond vs. syndicated loan

At first sight, bonds and syndicated loans have little in common. However, both can play a crucial role in providing long-term financing for a business. There is also a striking complementarity between bonds and loans.

A syndicated loan is a traditional form of bank financing, in which two or more credit institutions provide a loan on the same terms, based on common credit documents and managed by a facility agent. Since the onset of the financial crisis in 2009, however, we have seen a clear trend towards diversification of funding methods, enabling the bond market to do particularly well.

The benefits of a bond

  • Gearing corporate bonds to the funding requirements of your business by manipulating the issue volumes and terms to maturity
  • Medium to long-term funding
  • Deductible interest means that the costs of a bond issue are lower than a transaction on the share capital market
  • Large funding volumes to finance projects, without jeopardising the shareholder structure of your business

The benefits of a syndicated loan

  • Substantial amounts for long-term funding or short-term bridging finance
  • Flexible loan structure that can be tailored to your specific needs
  • Standardisation of credit terms between lenders, including financial covenants
  • Ability to introduce new banks and diversify funding sources
  • Simple credit administration

If you’re interested in one of these funding methods for optimising the financial structure of your business, don’t hesitate to contact your KBC relationship manager for more information.

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