Debt & Rating Advisory
Independent borrower advice throughout the capital life cycle
We provide independent and tailored debt & rating advice throughout the funding life cycle of SMEs to multinational companies. We create value for our clients by facilitating funding access, increasing funding capacity and optimizing funding costs forming key pillars of their development & success.
Small sized corporates
Swiss companies - especially the SME have traditionally heavily relied on bank funding, but mounting challenges in the banking sector relating to deleveraging and tightening regulations will increasingly create a scarcity of this trusted funding source going forward. The problem will particularly turn more acute for SME, that by definition require a proportionally higher level of capital allocation for funding by banks due to their perceived higher credit risk. Similar to other European countries, Swiss companies in general are facing considerable refinancing and financing needs over the near to medium term, concurring with the banks’ obligations to fully meet the aforementioned tightening regulatory requirements and reducing their capacity to serve as dominant funding source for SME.
Mid-market companies have traditionally been heavily relying on bank financing. However, due to the continued and mounting challenges in the banking sector linked to balance sheet deleveraging and tightening regulatory requirements this trusted funding source will likely become more scarce. The expected refinancing and financing needs in the near and medium-term going in hand with the reduced lending appetite of banks will pose considerable challenges to mid-market companies. Contrary to large-cap companies that have continuously biased their funding towards capital markets, this alternative funding source remains very limited among mid-market companies yet despite the demand for higher yields among investors willing and able to take on more credit risk offered by mid-market issuers.
Large multinational companies
A considerable number of Swiss large multinational companies have proactively responded to the banking disintermediation by seeking to fund their needs predominantly through the capital markets. Due to their size and mostly lower perceived credit risks, the companies are able successfully tap a wider range of financing sources and especially the capital market for their funding needs. In the face of rapid changes, uncertainty, and stress in the global debt markets, combined with the increasing requirements for an independent assessment of their inherent credit quality by regulators and the capital market participants, obtaining public ratings to ensure a continued access to larger sources of financing will become one of the key tasks of management.
Financial Services companies
On a wide spread base banks have and continue to embark on a de-leveraging process that, depending on the complexity and size, can take years. Tightening regulations are forcing banks to adjust their business models and take on lower risk businesses that absorb less of the increasingly scarce bank capital. Insurance companies tend to be quite well positioned but, just like in the case of banks, are likely to face emerging challenges impacting their credit profiles and ratings. These however are crucial for the continued and successful positioning in the capital market and the sustainable attraction of required funding sources.