Maximizing the Potential of Leveraged Loans

Higher capital adequacy requirements for banks are driving the decline in lending to corporates. Investing into corporate debt with Prime Capital as partner for structuring portfolio and access solutions, offers opportunities and long-term prospects for institutional clients. Regulatory restrictions on commercial banks are boosting the need for additional sources of finance and new partners. Institutional capital is playing an increasingly important role in this respect, not least as an investment option in the prevailing low interest rate environment. In-depth credit expertise, access to the individual borrowers and ongoing monitoring of credit exposure all require specialist skills. For institutional Investors, Prime Capital has already made this asset class investable by way of bespoke securitisation and fund structures.

The benefits of investing into corporate debt

  • Strong demand: Disintermediation is currently a feature of the market, which was previously dominated by banks, with regulation (Basel III and its successors, LCR, etc.) being the main driver; there is a major need for financing by SMEs, which creates corresponding opportunities
  • Attractive opportunities: Against a backdrop of more onerous capital adequacy requirements for banks, the market also offers attractive long-term prospects for institutional clients
  • Our know-how: Due to the low level of transparency, specialist knowledge of credit matters is essential
  • Outlook: Financing arrangements are gaining further importance; this makes the market of interest to medium and long-term investors.

Our services around acquisition finance

  • Portfolio construction and management as well as risk management in the context of AIFMD
  • Selection process for a suitable Sourcing Partner
  • Development of investment criteria, investment selection and portfolio composition
  • Conducting market conformity checks prior to acquiring the loans
  • Verification of all payment pre-conditions, incl. due diligence, calculation and verification of the purchase price and collateral check
  • Loan analysis and monitoring
  • Calculation of client-specific stress tests to meet regulatory or internal requirements
  • Portfolio optimization and calculation of key risk parameters based on a multi-period credit risk model
  • Preparation of client-specific risk and regulatory reports and monitoring of the portfolio’s investment guidelines
  • Liquidity monitoring and planning

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