Contact

Impact of the amendment to the law on debt refinancing and debt restructuring


,
Integral service around a transaction
BY : Diego GutiérrezApril Mon, 2014
investment, financingOn 7 March last, a series of measures were approved in relation to the refinancing and restructuring  debt. Among the measures introduced, we would like to analyse those that may have an impact on debt strategies. investment and sale of mortgage debt assets.

 

Syndicated loans

One of the main changes in this area is the need for a qualified majority (75%) to approve debt refinancing agreements. This avoids the blocking of minority positions with less than 25%.

This measure means that it is no longer possible to block other shareholders in the renegotiation process, but at the same time funds holding 75% or more have more flexibility.

Refinancing agreement

Refinancing agreements on deferral of payments for a period of not more than 5 years or conversion into participating loans, which are approved by 65% of the mortgage creditors, will bind the remaining 35%. If this figure reaches 80%, the remaining 20% may be obliged to accept agreements for debt capitalisation or debt cancellation.

This change makes it necessary to carry out a detailed analysis of a company's financial creditors when one is acquiring a syndicated debt ticket.

Bank of Spain

The Bank of Spain Act aims to incentivise Spanish banks to take measures to recapitalise their debts by classifying post-recapitalisation loans as "normal" if a company's business plan can allow for debt payments in the normal course of business. This reduces provisions for underperforming debts, once the debt has been restructured.

"In our view, these measures could encourage some Spanish banks to agree to recapitalisation solutions or to convert debt into equity loans, rather than selling their recovery rights at a hefty loss. We believe this could be applied immediately to hotel chains with operational business plans that are viable in the short term," analyses Diego Gutierrez.Abra Invest.

Other posts that may interest you

Direct lending: alternative or complement to traditional financing?

The food sector: investment for troubled companies

The winemaking sector needs to get its act together and it has already started

If you want to know more or if you think we can help you, do not hesitate to contact us.

The M&A Professionals

Meet our services

MEET
OUR
METODOLOGY

Do you want to be up to date?

SUSCRIBE OUR NEWSLETTER

Our diferentiation

Market Research Technology
Our team of market analysis specialists is continuously analyzing the investments of the most active markets in the industry in order to unceasingly contribute ideas of the current market situation and identify the most relevant trends for senior management. We integrate the most relevant sources of information which allows us to discover the most interesting companies for venture capital and similarly helps us to identify the investors with the highest probability of involvement in an M&A process to ensure the success of our sell-side operations.

The reports and deductions of our advisors provide a broad view of the sector, both geographically and from the complementary or adjacent markets perspective.
Technology Data Analytics
for M&A
Advanced data anlytics is a weapon". Intelfin is an artificial intelligence tool we use for investing and creating value in SMEs through competitive analytics and the enterprise environment.

IntelFin consists of a cognitive system, which, through the application of advanced analytical technologies, facilitates the automation of investment and financing decisions in the field of non-listed companies and especially SMEs in high-growth sectors.

The information related to these companies is characterized by their lack of transparency and heterogeneity; thus, it is necessary to develop an advanced analysis which is as much predictive as prescriptive and is developed in a natural language custom, suitable to obtain greater clarity and knowledge of the investment scope.

The IntelFin system focuses especially on analyzing the variables that define and influence the competitive environment of a sector and the positioning of a company, analyzing their influence on future value creation. Therefore, IntelFin supports strategic decision-making to senior management by resolving questions such as:

¿What are my competitors' priorities, strategies and expansion plans? Who's my competition? Which competitor is most likely to grow at a higher rate?
Which areas of activity/business models will receive the most investment? Which sectors are most attractive to investors?
Which companies are going to experience the most growth in the near future? Which companies are most likely to receive investment or be acquired?
Training Methodology
We have developed training programs in an innovative set-up which guarantees our teams the acquisition of technical competences both in the field of corporate finance and in the field of psychology, that is much needed when it comes to negotiation processes.

We have a culture of continuous improvement of our processes, closely related to the use of information systems that allow the enhancement of internal communication between our teams, as well as external communication with our customers. Hence, we extend best practices identified internally in an efficient and rapid manner among our members.

Are you one of those who prefer to be well informed when making decisions?

M&A NEWS
INDUSTRIAL REPORTS
closearrow-circle-o-downchevron-downcrossmenu