In a competitive business environment, efficient access to various forms of debt and equity capital at the most beneficial terms and pricing is a key differentiator in terms of liquidity, financial performance, bidding processes and shareholder value. Centrus provides clients with a holistic offering across the banking, project finance and debt and equity capital markets, ensuring that clients have access to the full range of options in delivering the financing solutions most appropriate to achieving their corporate objectives.
In rapidly evolving funding markets we maintain strong and up to date relationships with a wide range of banks and other financial institutions. This ensures that our clients are able to rapidly identify and access the optimal sources of funding with the assurance of a competitive and professionally run process which presents the borrower’s credit to prospective funders in the best possible light.
Equity & Risk Capital
Risk capital is used to fund higher-risk, higher-reward investments. The funds can be deployed at various points in the capital structure depending on the risk appetite of the investor. The lower risk end of the spectrum tends to involve a form of junior or mezzanine debt with the higher risk level being pure equity.
The optimum capital structure analysis will often determine the appropriate level of risk capital to be deployed in the business. Different forms of risk capital include:
- Junior debt – this has a lower priority than of another debt claim on the same asset or business in a default scenario and will be paid after senior debt in the payment waterfall. This debt will command a higher return than senior debt and can often be sourced in the bond market as high yield bonds.
- Mezzanine debt – this is a hybrid of debt and equity financing. Mezzanine financing is basically debt capital which will usually give the lender the right to convert to an ownership or equity interest in the company if there is a default. It will be subordinated to any senior debt but rank ahead of equity in the payment waterfall.
- Equity – This is the riskiest form of capital investment as unlike debt it is not repaid to the investors in the normal course of business. Equity financing can be raised in many ways from a private placement of stock to a public offering. There are also a number of different forms of equity finance such as preferential equity which ranks ahead of ordinary equity in the waterfall. Ultimately the value of equity capital in a business is determined by estimating the current market value of its assets minus all liabilities.
Centrus can advise companies all the way through your capital financing lifecycle from raising the initial equity finance to develop your business to determining the optimum capital structure as your business grows and raising any type of debt finance from senior to the most junior to ensure maximum return for shareholders.
Centrus has worked on a wide variety of innovative and complex financings across different jurisdictions and can ensure that the most efficient and appropriate financing partners are found for your business.