Merodis helps small and medium-sized enterprises to raise debt financing outside the traditional route through the banks. The way this is done is by issuing bonds or concluding so-called bilateral loan agreements, either directly with interested institutional parties such as insurers, pension funds, family offices, or funds specialised in private debt/mezzanine. This market of “private placements” is growing rapidly as disintermediation (a process in the financial world whereby parties make less and less use of banks and conduct transactions directly with each other) has been on the rise in Europe since the financial crisis of 2008. At Merodis, we can help you with the soft sounding of investors, where the appetite in the market for your company as an issuer is assessed, drafting of the teaser and information memorandum, organization of roadshows, pricing of the transaction, drafting and negotiation of the ad-hoc documentation and finding interested investors.
Since the financial crisis, the over-reliance on bank financing in Europe has diminished as disintermediation is on the rise. Indeed, during the financial crisis, it became painfully clear that diversification of the various sources of financing was necessary, because just when the need was greatest, liquidity dried up at the banks. It is this diversification that explains the success of “private placements”, a market that today amounts to more than EUR 40 billion in Europe. Private placements have their place between benchmark corporate bonds and bank financing. The documentation for these placements has become simpler, more flexible and more standardised. Pricing is competitive, and terms are usually longer than traditional bank loans. It provides a diversified, stable funding mix and is an important first step towards capital markets. In addition to this, of course, it is a great marketing tool that extends your company’s investor base beyond your traditional home banks. Important in this aspect is the expansion with investors who are not looking to cross-sell or offer additional services, but are only focused on providing financing. In recent years, the Belgian market has become more active, with several transactions per year by companies discovering the advantages of private placements.
Merodis can be your independent and impartial advisor for these types of financing transactions. In concrete terms, we will do the following for you: