An IM with a Twist: Debt Facility Renewal Memorandum

 

A Refocused IM: Debt Facility Renewal Memorandum

Evahan is experienced in preparing Debt Facility Renewal Memoranda. These Information Memoranda are prepared for bank and non-bank debt lenders and aim to renew or rollover existing business debt facilities, such as secured principal and interest term loans, interest-only facilities, working capital facilities like an overdraft, and hybrid debt instruments like convertible notes.

Most debt lenders require borrowers to provide information to finalize the renewal or rollover of the facility, as specified in the debt facility agreements. 

The typical table of contents of Debt Facility Renewal Memoranda is:

1. Historical Financial Performance: A review of the company's past financial performance, usually Statutory or Audited financial statements and Management Accounts for the period from where the statutory or audited financial statements leave off to the present time
    
2. Management and Key People Updates: Updates regarding management and key personnel. Specifically, any changes of key people.
    
3. Market Outlook: Update of the businesses target market(s) considering size, growth, contraction trends
    
4. Revenue outlook: detailed revenue projections for the next 12 months
    
5. Cashflow and Profit and Loss Projections for the next three years
    
6. SWOT analysis with a particular emphasis on significant short to medium-term threats and opportunities.
    
7. Valuation Updates: Valuation updates of any real property, if requested by the bank.
    
8. Suitability of Current Debt Facilities: Are any changes required? For an example an increase in working capital? Slowing down principal repayments. Consolidation? term extensions or reductions?
    
9. High-Potential Opportunities: Exploration of "pie in the sky" opportunities that could potentially yield significant returns.