In the course of arranging new credit facilities, we frequently are able to arrange "discounts" on the previous credit (usually 10% - 25%) - thus allowing substantial equity gains and working capital increases for the refinanced company - with no additional assets or guarantees pledged.

Your balance sheet will become much stronger and more attractive to the new lender because your leverage (debt / equity ratios) will be significantly lower. (This is good and what you want!)

Quite often during an acquisition financing (leveraged buy-out), lenders are willing to discount the acquired company's credit facility as an accomodation to the purchaser to close the new deal.

The previous lender's objective is to "exit" the credit quickly and smoothly without incurring too much of a discount in the process. The loan has been repaid with what he considers to be an acceptable amount for a "special credit" he has been asked to assist in leaving the bank for a variety of reasons (losses, leverage, industry, etc.). The client is anxious to leave an adversarial banking situation.

The new banker feels comfortable with the new credit facility knowing the client has a working capital availability "cushion" he can draw against in case of special contingencies and needs his new client may incur running his business in the future.

Both lenders and the client are happy with the new credit facilities and all objectives have been achieved. The company now has an opportunity to operate in a "friendly" banking environment and an atmosphere conducive to making money and growing profitably. (See COMMENTARY-Market Update)

We specialize in working very effectively with the old banking relationship to discount the credit facility as much as possible when the client company leaves the bank and maximizing the highest availability of additional working capital with the new banking relationship. The client is in a "win - win" situation with the old and the new financial institutions.

We are experts at negotiating loan discounts for our client companies and do so with most deals.