We use cookies to personalise the website and offer you the greatest added value. They are, among other purposes, used to analyse visitor usage in order to improve the website for you. By using this website, you agree to their use. Further information can be found in our data privacy statement.

Transaction advisor in the process of corporate refinancing


Refinancing is the process through which companies raise fresh capital by replacing the existing financial obligations with new contracts that have updated terms, i.e. loan amounts, interest rates or repayment schedules. Typically, refinancing is used either to obtain better financing terms due to better credit rating or reduced interest rates, or to raise capital for operations (e.g. working capital financing) and for investments (e.g. M&A or growth projects).

However, refinancing might also be an important source of liquidity in times when earnings and cash are lower than usual due to external shocks. This option is even more significant now, as the spread of the COVID-19 pandemic and the resulting lockdowns have had a negative effect on demand in many industries (i.e. automotive, aerospace, hospitality). A drawback of refinancing in times of low earnings is that the terms and covenants of new loan agreements are likely to be stricter, as the uncertainty of future cash flows and the risk of default increases.

Regardless of the reasons that push a company towards refinancing, the primary goal in the refinancing process is to increase the likelihood of obtaining financing on reasonable terms. In this respect, the choice of a competent transaction advisor becomes highly important as their expertise and guidance bring added value in every step of the refinancing process.


The refinancing process

The typical corporate refinancing process consists of the following 4 stages:

  1. Evaluation – analyse internal (profitability, liquidity and investments) and external (credit rating, interest rates, shocks) environment to assess the need for capital through refinancing;
  2. Preparation – select the corporate finance and transaction advisors, collect and analyse the data to develop the credit story and business case and discuss the areas for due diligence (financial, commercial, technical, etc.);
  3. Implementation  – contact potential creditors, provide information (incl. business plan, due diligence reports) and conduct Q&A sessions with potential interested parties;
  4. Closing – negotiate and finalize the refinancing process.

Main focus areas

Having a clear focus during every stage supports an efficient management of the refinancing process as it not only results in lower (internal & external) costs, but also increases the chances of obtaining appropriate financing conditions.


In the evaluation stage, it is important to allocate resources appropriately by effectively and continuously monitoring the external and internal environment and its effect on liquidity using a comprehensive set of KPIs. Reluctance to address this task can lead to a delayed response to liquidity problems, which can consequently trigger a restructuring process or even default.

Collecting financial and non-financial data is essential to ensure a reliable flow of information during the preparation stage, as they are the key input factors for the analyses to develop the credit story and the business case. Inconsistencies between data sources and failure to incorporate non-financial KPIs can lead to inaccurate financial figures and business plan estimates. This brings us to the next important step of the preparation stage, namely developing the story which the company wants to communicate to its potential financing partners. The key messages need to be supported by the financial analyses and the reason for the refinancing must be clearly indicated (i.e. better credit rating, growth investments, or reduced liquidity). At this stage of the process, it is necessary to look at the figures from a creditor’s perspective and analyse why they should support the refinancing of your company.

In the implementation stage, the main focus is to provide the interested parties with all necessary information so that they can make an informed decision. This also involves Q&A sessions with potential financing partners to address any questions they might have regarding the company’s financial situation.


Importance of a transaction advisor

The refinancing process can be lengthy and involve many hurdles for the company. For this reason, it is important that a competent transaction advisor is available to assist the company throughout the process.

During the preparation stage, the transaction team will assist the company in com-piling, preparing and reconciling financial and non-financial data from multiple sources, thus increasing process efficiency and information consistency. Moreover, when developing the credit story, the transaction advisor not only analyses and visualises the data, but also adds value by appropriately underpinning the message the company wants to deliver to investors with the analyses. This added-value consists in conducting a sensecheck of the business plan assumptions and evaluating financial data that are of significant importance to potential financing partners such as adjusted EBIDTA, free cash flow and working capital. As a result, the transaction advisor will support and refine (through Financial Due Diligence) the company’s refinancing by anticipating the needs of potential financing partners.

In the next stage, namely implementation, the experience of transaction advisors will provide useful insights during the Q&A sessions. As transaction advisors have expertise on both sides of a transaction, they can anticipate and address the areas of importance for financing partners and facilitate the refinancing process. This proved to be particularly beneficial in the next stage as it lays the foundation for the negotiations.

Finally, the transaction team provides (indirect) support even after the refinancing process has been completed. Companies will benefit from using the insights gained from the transaction advisor during the previous refinancing process. In the future, they will know where to place focus when analysing the relevant KPIs, what aspects and data are important for financing partners and how to increase the efficiency of future financing initiatives and thus minimise the costs incurred.



When conducting a refinancing process, the primary goal of the company is to increase the likelihood of obtaining financing on reasonable terms. As the path towards refinancing can be challenging, the choice of a transaction advisor can be of crucial importance for the outcome of the refinancing process. A competent team of transaction advisors not only prepares the Financial Due Diligence, but also supports developing and refining the company’s credit story by taking an outside-in approach to analysing the company that considers the needs of the financing partners so that they can make an informed decision.

 From the Newsletter


Contact Person Picture

Matthias Zahn


+49 89 9287 802 15

Send inquiry

Contact Person Picture

Glendi Maliqati


+49 89 9287 80 328

Send inquiry

 Experts explain



Deutschland Weltweit Search Menu