Capital Markets
Securitisation
Our experienced capital markets team provide a securitisation service - a method of funding and/or transferring credit risk on a specific pool of homogenous financial assets. Fundamentally, securitisation attempts to isolate identifiable assets from the credit risk of the originator. The purchaser of these assets, typically a special purpose company, issues securities to pay the purchase price for these assets and then uses the cash flows from these assets to repay the issued securities. These structures can potentially enable clients to fund at levels cheaper than would be the case were they to borrow against their own credit or in the banking market and potentially obtain greater leverage than would be the case in a traditional bank loan . They also allow clients to tap an alternative investor base, and for regulated financial institutions potentially optimise their regulatory capital.
Characteristics of typical securitisation transactions include:
- Reliance on the performance of such assets (and not the credit quality of the originator) for payment of finance
- Insulation from or mitigation of exposure to originator events
- Liquidity and hedging facilities to eliminate cash flow disruptions
- Formal credit rating of the transaction
We work hard to provide an integrated financing approach, whether it be an underwritten solution or enabling our client to issue directly to the market. Every securitisation we arrange is unique to the business involved, allowing you to benefit from a deal that maximises your business benefit.
To find out more please contact Corporate Banking customer enquiries or speak to your Corporate Banking relationship manager directly.
Corporate Bonds
Our specialist Corporate Bonds team can help you source long-term (up to 10 years), committed but callable financing which can be issued with fixed or floating coupons and involve a bullet repayment. These tradable bonds are generally subordinated to traditional bank loans and are marketed with a minimum issue size of around £100 million.
Some key features of Corporate Bonds:
- Generally fixed-rate, although floating-rate notes are possible– and all have a non-amortising bullet structure
- Carry only a small number of "incurrence" covenants ("cov-lite" in loan market parlance)
- Generally structurally subordinated to existing bank debt, although senior secured bonds are increasingly popular
- Require credit ratings from both Moodys and Standard & Poor's
- Minimum issue size is c.£100 million - for smaller sums a private placement may be more appropriate
- Sold publicly to a wide array of institutional investors through a short marketing process
We recognise that every company is different and we strive to make sure that you receive the best guidance on the structure of the bond which is best for you.
To find out more please contact Corporate Banking customer enquiries or speak to your Corporate Banking relationship manager directly.
Private Placements
We offer private placements which provide committed long-term capital, the structure being tailored to clients' requirements and the size being around £40 million and upwards. Maturities are typically longer than in the loan market and terms can be more flexible. Private placements usually rank pari-passu with existing bank debt and in fixed-rate form they can only be redeemed early via a "make-whole" call.
Some key features of Private Placements:
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The ability to provide longer maturities than in the loan market (seven to twelve years is the norm) often with more flexibility, in that the bank-style covenants typically involve greater headroom
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Usually, private placements are fixed-rate and pari-passu with existing loans although issuing floating-rate tranches may be variable
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They enable companies to tap into a deep pool of debt finance available in the global life-insurance industry without the need for public credit ratings or for listing the private placements
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They are sold privately to a small group of buy-and-hold institutional investors. With no public ratings required the issuing process is quicker, less costly and more discreet compared to a publicly-marketed corporate bond
The private placement market is both broad and complex. We have the expertise to guide you through the process of understanding whether a private placement is a suitable source of capital for your business. Our aim is to make sure your business is well-funded and able to meet its corporate objectives.
To find out more please contact Corporate Banking customer enquiries or speak to your Corporate Banking relationship manager directly.
