In much of the world, commercial lenders are the dominant providers of project finance, corporate and municipal/local government debt. In a few markets such as the United States, the capital markets (the bond markets) provide the dominant source of debt funding within many of the sectors we focus on, including the infrastructure, energy & utilities, industrials, oil & gas and real estate sectors. Therefore, in most transactions that we advise on, the role of commercial lenders is an extremely important element of the overall financing transaction.

Commercial debt fundraising services are a complementary and an integral component of many of our comprehensive transaction advisory services mandates. At times, we may also serve as the lead lenders' advisor, which includes the provision or coordination of all relevant commercial, technical and legal advice to lenders in a particular transaction. Many DCS affiliate experts are former bankers, lawyers, corporate executives and financial advisors who possess decades of experience in structuring and executing commercial debt transactions.

Within the sectors and geographies that we cover, we maintain relationships with most of the major commercial banks and other commercial lending institutions in those markets. Accordingly, when serving our borrower clients, we can offer unparalleled insight and access for our clients in terms of lenders' criteria, requirements, expected terms, conditions and costs and potential suitability and interest in our client's funding project.

The following applications of commercial debt that we focus on within the sectors and markets the we cover:

Project Financing. Project financing commercial loans and related commercial letters- and lines-of-credit, guarantees and similar credit facilities are used to fund an infrastructure project (new-build, rehabilitation/renewal), an industrial plant or facility and purchase of equipment, or other large capital project. Project financing is typically sought as pure "non-recourse" financing. However, in some cases and dependent on the specific sector and project type, it may be necessary to provide certain "limited recourse" features in the project financing.

Acquisition Financing. Acquisition financing entails commercial loans and related commercial letters- and lines-of-credit, guarantees and similar credit facilities used to fund the leveraged acquisition of a company or an existing asset. Acquisition financing may be secured by both the security of the acquirer and the acquired company and/or assets.

Corporate Financing. Corporate financing entails commercial loans and related commercial letters- and lines-of-credit, guarantees and similar credit facilities used to fund all general corporate purpose activities, including capital investments, working capital, liquidity and share repurchases. Corporate financing is generally secured by the assets of the company.

Lease financing. Lease financing entails a commercial bank financing an acquisition of capital assets or equipment by a leasing company (lessor), which are, in turn leased to a lessee. In this case a commercial lender would finance the acquisition of the capital assets and equipment and the lease payments paid by the lessee will be used as repayment to the lender. Leasing, as opposed to purchasing capital assets or equipment, can in some cases be advantageous to our clients in comparison to purchasing, from a tax and accounting perspective. Also, in certain cases our clients, who are owners of capital assets and equipment will find it advantageous to enter into sale-leaseback agreements (which is a form of monetization).

Monetization/Securitization financing. Asset owners such as companies and governments (or government instrumentalities) may wish to "carve-out" and "securitize" specific capital assets or "monetize" future revenue streams through a commercial loan facility. In the case of a monetization/securitization structure, the commercial lender will provide a (usually amortizing) loan that may be secured by a collateral pledge of the underlying capital assets and/or a pledge of certain future revenues streams. Proceeds from monetization/securitization transactions may be used by corporate or government borrowers to fund other capital investments, acquisitions or to provide corporate liquidity. Monetization/securitization financing may be an alternative to selling (or privatizing) companies or assets.

As the "borrower side" debt advisor in the case of a project financing or refinancing, we will assist our client throughout the entire commercial debt fund raising process from identifying a list of potentially suitable commercial lenders to execution and closing of loan agreements. Typically, corporate, acquisition, lease or monetization/securitization financing arranged through a company's relationships may be much shorter and less onerous process. The following outlines the typical "borrower side" process that we provide under a commercial debt project financing advisory mandate.

Preliminary discussions with potential commercial lenders. DCS experts maintain standing relationships with many potentially suitable commercial lenders in the geographical and sectoral markets that we cover. Based on interactions with these lenders, we can always share our initial views with our potential clients as to the our view on the interest levels and potential commitment amounts, pricing, terms and conditions that may be expected from these lenders. We can also quickly access the appropriate departments and representatives within these lender institution, and arrange initial "heads-up" meetings and provide a brief introduction to the financing project and the borrower (if appropriate).

Financial modeling. Amongst the first activities that we will undertake when mandated as the borrower's advisor is begin to develop a financial model (or update and amend a previous model, in the case we may have worked on the client's business or asset in the past). The "debt case financial model" will evolve through the course of the debt capital raising process. It will become increasingly refined and may be adjusted ton incorporate certain comments from prospective lenders. Amongst other purposes, the debt case financial model will be utilized to demonstrate to creditors that the key pro forma financing metrics of the project or company conform to the lenders guidelines and criteria for leverage, coverage and liquidity ratios. Another key function of the debt case financial model will be to demonstrate to lenders that under certain pessimistic "down-side" performance scenarios, that the project's or company's cash flows will be sufficient to continue to sufficiently service the debt. In due course, the debt case financial model will be shared with potential lenders via the data room and will be an essential tool for discussions and negotiations with prospective lenders.

Assemble and coordinate borrower due diligence. An initial and ongoing process will be to assemble all internal and third-party due diligence (contracts and agreements, audits, reports, studies, analyses, databases, etc.) This data will be necessary for assembly into the Lender Information Memorandum (LIM), discussed below. However, a great deal of this data will also be necessary for the financial modeling workstream. In some cases, where there may be due diligence items (such as third-party reports, studies and analyses) that are lacking or insufficient, the borrower can decide whether to pursue these at that time.

Preparation of lender teaser presentations. We will prepare a brief "teaser" presentation, which contains a very short description of the borrower, guarantors and security (if applicable) and the financing project. The Teaser Presentation is based on public, non-confidential information. We will send the Teaser presentation to a list of "Potential Interested Lenders" (PIL) for their initial consideration and feedback as to suitability, level of interest and also receive and evaluate their initial concerns and comments.

Develop and maintain "Potential Interested Lenders" (PIL Lists). In conjunction with preparing a Teaser Presentation, we will develop and maintain a PIL list containing a record of each potential investors' receipt of the teaser, participation in lender/road show presentations, signing of NDA (if applicable), receipt of LIM and virtual data room access and activity in data room etc. The PIL list can be used to monitor the evolution of PIL lenders' activity and levels of interest.

Road shows and lender presentations. Road Shows and Lender Presentations, have traditionally been conducted in a physical format. In the COVID-19 and post-COVID world environment many road shows and lender meetings are conducted virtually. Physical road shows can be conducted either as group presentations or as individual presentations with key PIL lenders at an agreed location. Typically road shows can be conducted on a regional or global basis. In other situations it may be possible and desirable for all interested lenders to travel to the borrower client's location. Whether a group meeting or individual meeting format is pursued, it is generally possible for meetings to be arranged in major financial centers where all parties can agree to meet at specific venues. Aside from considerations such as COVID travel restrictions, the decision as to whether to conduct virtual or in-person, group or individual, client site, regional or global lender road show meetings depends on many factors, including budget and timeframe, types of lenders, size of transaction, level of interest from other key lenders and many other factors. DCS advisors will assist the client in selecting the best road show / lender presentation approach based on the unique circumstances of the transaction.

Non-Binding Commitment Letters (or Non-Binding Letter of Interest) (NBCL/NBLoI). We will next request PILs who are remain interested in signing an NDA (if applicable) and accessing the LIM and virtual data room to first provide their NBCL/NBLoI) and accompanying indicative, non-binding terms sheets (which we attempt to attain as much detail as possible, but at a minimum contain indicative commitment amount, currency denomination, final maturity, amortization, pricing and key required covenants , terms and conditions). The NBCL/NBLoI's will always be subject to final lender due diligence and credit committee and other internal approvals. In some cases there may be a rationale to shortlist or down-select PILs at this level based on their qualifications.

Lender Syndicate Structure. Based on the types of lenders who have provided NBCL/NBLoI's, and after discussions with those lenders and our client, we will recommend a preferred lender syndicate structure. Depending on the specific circumstances, we may decide on a Mandated Lead Arranger (MLA) structure, a club financing, a syndication, an agency structure or other related variation. In any case, there will likely emerge one or more key "lead lenders" that other lenders will depend upon in taking a lead role on due diligence and lending decisions. Going forward in the process we will focus mostly on these key "lead lenders" while keeping all other lenders who have provided in the NCCL/NBLoIs in the discussions and providing access to all information and feedback.

Non-Disclosure Agreements (NDAs)(if applicable). It is essential for both the borrower and the prospective, that all material non-public information provided to support lender due diligence remain confidential. NDAs will be signed by each PIL interested in receiving the Lender Information Memorandum (LIM) and access to the virtual data room. Under some situations (usually government-related transactions) the borrower may be subject to public disclosure requirements and is prevented from entering into NDAs. In cases of competitive tenders, there may be multiple buy-side (or "contractor") bidders who wish to access the same commercial lenders. In this case, where the lender agrees to remain non-exclusive, it is common that the lender would establish multiple internal "trees" where separate and distinct groups are assigned to various bidders and each would sign separate NDA's with those respective bidder groups.

Lenders Information Memoranda (LIM). We will prepare the LIM, which provides potential buyers with a highly detailed presentation of the financing plan, key financial metrics, pro forma revenue and debt service coverage projections and related sensitivity analyses, proposed key creditor protections (covenants, security, pledges, guarantees, etc.), risk allocation profiles, company or asset business and market discussions, contractual and corporate structures, management structure, proposed contracts and credit agreements, legal and technical analyses, market studies and demand/revenue forecasts, environmental and social plans and policies and bankable feasibility studies (as applicable). Much of this information will generally constitute material non-public information. Data in the LIM will be supported by information and date contained in the virtual data room. The LIM and data room will be used by the commercial lenders to conduct necessary due diligence.

Virtual Data Room. On behalf of our borrower clients, we will establish and maintain a secure and encrypted "virtual data room" as a repository for all confidential and non-confidential information that will be accessible and used by potential lenders in effort to complete lender due diligence, provide binding commitment letters and execute loan agreements.

Management meetings and site visits. In most cases, the potential key lead lenders will request one or more physical or virtual meeting(s) with the borrower's and/or guarantor's management and potentially site visits (COVID era travel restrictions has limited this possibility). We will generally arrange these meetings as as group meeting for the group of potential key lead lenders. These meetings are generally for the purpose of allowing the PIL lenders to ask additional questions of the borrower's management on items that cannot be adequately answered in the LIM and data room (or by DCS as the debt advisor).

Final Negotiations. After the the "key lead lenders" have completed their due diligence, the DCS/borrower-side advisory team will negotiate all substantive final terms, conditions and pricing in the credit agreements and related schedules.

Binding Commitment Letters. Based on the agreed material terms of the credit agreement(s), we will request that the member parties representing the committed loan syndicate each provide their Binding Commitment Letters, which shall include final binding terms sheets including all material loan terms, including the commitment amount, currency denomination, final maturity, amortization, pricing and key required covenants, terms and conditions).

Commercial Closing. The date that all credit agreements and schedules are dually executed between borrower and the lender(s).

Financial Closing. The date that all conditions precedent of the borrower and the lender are satisfied and loans and lines can be drawn by and other credit credit facilities become effective.

In some project finance and development finance situations, commercial financing is also combined with categories of debt financing such cases where the financing structure also involves credit from Export Credit Agencies (ECA's), Export-Import Banks (EX-IMs), Development Finance Institutions (DFIs), International Finance Institutions (IFIs), capital markets (bond investors), governmental lenders and providers of providers of hedging instruments(derivatives counterparties). Particularly in the case of ECA/Ex-Im/DFI/IFI-linked financing there are specific structures available (such as "covered loan" structures, "B-Loan" and DFI/IFI-led loan syndication structures). In some cases, having multiple classes of lender in the financing stack can introduce unwieldy intercreditor issues. DCS advisor have a great deal of experience with multi-class debt structures and in favorably negotiating intercreditor agreements between multiple investor classes.

DCS advisors are able to provide commercial debt capital fundraising services on a stand-alone basis on behalf of public and private sector clients who are pursuing project financing, acquisition, refinancing/restructuring/workout transactions or monetization/securitization transactions. In most cases, as commercial debt capital fundraising will be only one element of a larger project delivery program, DCS will also be providing other complementary transaction advisory services in relation to other transaction elements. Our preference is always to provide such comprehensive transaction advisory services and coordinate all elements of the transaction, including project financing on behalf of our clients.

Under any commercial debt capital fundraising advisory mandate, DCS will draw from our vast global network of veteran industry expert advisor affiliates and our relationship consultants in order to assemble the most appropriate team to match the specific needs of the transaction at hand. This will always include leadership of DCS affiliate experts who possess decades of global transactional experience related to the specific sector and transaction type. In any commercial debt capital fund raising transaction advisory service mandate, our preferred role is always to serve as the lead project/program manager. Within this role we are also able to assist in the selection and procurement (or subcontracting) and management of other advisors, including local and international legal, technical, tax, commercial and due diligence advisors or other specialized advisors, as the specific transaction may require. To the extent that other third-party advisors are required, there are many value added advantages of allowing DCS to assist in the procurement of these advisors. First, DCS expert affiliates themselves possess many of the legal, technical, commercial and managerial skill sets and we are best positioned to determine which additional outside third-party skill sets are required and which firms or individuals should be hired in these roles. Secondly, commercial debt capital fundraising projects are often very complex undertakings, requiring the management and coordination of many simultaneous workstreams. DCS advisors are experts inproject and program management services and are ideally suited to manage and coordinate a multi-dimensional advisory team most efficiently and effectively.

Complementing our commercial debt capital fund raising advisory services, DCS advisors offer the following complementary advisory services that may be applicable, dependent on the transaction situation.

DCS experts provide comprehensive commercial debt capital fundraising advisory services in the following sectors that we specialize in. Please click on the below links to learn more about the sectors that we cover: