Senior debt, mezzanine and convertible bonds: structuring the debt that truly fits
your project

It is a common scenario. Your project — an acquisition, a major industrial investment, a restructuring of the shareholding — requires EUR 8 million. Based on your operating cash flow and its prudential ratios, your bank offers EUR 5 million. The natural reflex would be to open up the share capital to close the gap; but giving away 20 or 30% of your company for a one-off financing need means paying a very high price — permanently — for something that could have been solved another way. The other typical situation is the fast-growing company whose balance-sheet history does not yet reflect its potential, and which conventional bank credit scoring automatically penalises.

Structured finance works like a building. On the ground floor sits senior debt: provided by banks, repaid first and the cheapest, but capped by your ratios — the well-known DSCR (debt service coverage ratio), which measures your ability to meet your repayments, and net debt/EBITDA leverage. Upstairs is mezzanine debt: subordinated to the senior debt, often repaid in a single bullet payment at maturity, and more expensive because it takes more risk — but it can bring in the millions the bank cannot lend, without touching the share capital. Some funders also offer unitranche, which merges the two floors into a single facility that is simpler to negotiate and to live with. Finally, convertible bonds sit on the half-landing in between: debt today, with an option to convert into equity tomorrow — a compromise valued by investors who want to back your growth without fixing a valuation straight away.

Structuring debt starts with financial analysis: we rebuild your real borrowing capacity (normalised EBITDA, operating cash flow, working capital seasonality), test several repayment scenarios and design the structure that leaves the business room to breathe — a financing that is perfect on paper but strangles operations is a bad financing. We then write the credit file in the language of credit committees, approach banks, debt funds and mezzanine lenders from our network in parallel, and negotiate line by line: pricing, repayment holidays, covenants, security and personal guarantees. On that last point our position never changes: a director's personal guarantee can be negotiated, capped and sometimes avoided. At every stage, we take the time to explain what you are signing — the covenants in a loan agreement may bind you for seven years; you need to understand them fully before you sign, not after.