In today's modern economy, the capital markets are accessible not only to large corporations but also to small and medium-sized enterprises. We advise a diverse array of issuers seeking to raise capital, offering strategic guidance and comprehensive solutions tailored to their specific financial needs.
The advantages of the capital markets extend far beyond conventional bank loans, empowering businesses with unparalleled flexibility and strategic opportunities. We are experienced in adapting the terms and conditions of the financing instrument to the needs of the company, finding strategies to externalize corporate risks and providing greater flexibility in the use of the company's assets.
Individualization: When companies turn to the capital markets for funding, they embark on a journey distinct from traditional bank loans. Instead of merely borrowing funds, they craft financial instruments tailored to their unique needs. This approach allows businesses to incorporate specific financial and tax considerations into their financing structures. The spectrum of offered instruments is vast, spanning from fixed to variable interest products, tied to reference interest rates, issuer performance, or underlying assets such as commodity prices or exchange rates.
Externalization of corporate risks: Capital market securities offer more than just financing; they can also serve as instruments for prudent risk mitigation. Consider a scenario where a company's performance hinges on the volatile steel market. Here, the risk of fluctuating raw material costs looms large. By designing instrument coupons to respond inversely to steel price movements, businesses can partially hedge against this specific risk, adding a layer of financial stability to their operations.
Flexibility in the use of the company's assets: In light of Basel III, banks often require substantial collateral for loan approvals. This frequently involves liens on real estate, pledges of operational resources, and accounts receivable. Unfortunately, such practices limit a company's ability to manage its assets freely. Capital market issuances, on the other hand, typically do not necessitate collateral provision. Companies need only commit to abstain from offering collateral when issuing future instruments to investors. Nevertheless, there remains an option to offer collateral strategically, potentially securing more favorable interest rates.
