Debt advisory finds success in 2016
HMT established its Debt Advisory business in September 2015. 2016 has been an excellent first full calendar year for the franchise with 6 deals completed and c£50m debt arranged. In addition, another 2 deals are approved by Credit and due for completion shortly, so 2017 should get off to a positive start.
Furthermore, the early stage pipeline has been and remains robust and absent from significant credit shocks, 2017 is likely to be an even stronger year for the Debt Advisory business. At a macro level, if credit markets can cope with the unexpected events of 2016, it is hard to imagine what will throw them fundamentally off track in 2017.
Completed deals include a new finance package for Cirencester based SaaS business Kallidus, acquisition funding for Northamptonshire Hotel & Leisure business Whittlebury Park, growth capital for trampoline arena operator Jump In and a debt package to support the MBO of Dudley based pressings business Clamason Industries.
However, raising debt continues to become even more stringent and complex than it was before, with processes frequently becoming elongated as business owners manage increasingly granular information and data requests from lenders.
But a positive feature of 2016 is the spread of lenders supporting HMT’s transactions including mainstream clearers HSBC and RBS along with challenger banks such as Clydesdale, Santander and OakNorth Bank. We expect the stable of active lenders to continue to evolve (to include Credit Funds and ABL providers) in 2017, although individual credit processes are likely to remain relatively challenging.
Since the Summer, HMT have increasingly seen incumbent lenders more actively manage credit risk, particularly in specific markets and sectors. Alongside a possible new wave of restructurings, HMT believe this could lead to a higher volume of rebankings in 2017 and 2018.
Hiring the right Debt Adviser can help a borrower save money and time by in-sourcing debt and project management expertise to run a financing process efficiently and effectively.
HMT will continue to differentiate its Debt Advisory offering by focusing on SME and lower mid market clients who appreciate its:
- market reputation combined with its established contact base that helps bring borrowers and lenders together efficiently
- unique experience and market position, which enables HMT to offer impartial advice and opinions to guide clients towards the best debt funding solution
- commercial excellence that means HMT can source and negotiate the best deal for clients, delivering the optimum balance between pricing and commercial terms
- Partner based delivery and execution model