Gambit Corporate Finance

All News

Debt Capital Markets Gambit Review Summer 2021

01 July 2021

Gambit Corporate Finance LLP is pleased to announce the publication of its Debt Capital Markets Review for Summer 2021. The report examines the latest developments in the debt markets, providing insight into the domestic lending landscape and analysis of the current key trends and considerations for mid-market companies when assessing current borrowing facilities and capital requirements.

Report Summary

  • The easing of lockdown measures has led to a rebound in both the UK economy and investor confidence, with companies now restarting their corporate development strategies, supported by a flexible debt market.
  • The funding landscape has settled and the range of funding options to support strategic ambitions is extensive. Lender appetite remains healthy for borrowers that can demonstrate stability of earnings and high quality management teams.
  • Record cash balances and increasing levels of debt have caused a degree of polarity in borrowers’ balance sheets. Many businesses are well positioned to attract additional capital in 2021, although others will be required to review current facility arrangements and consider refinancing strategies where appropriate.
  • Despite the wave of increased borrowing caused by Covid-19, a quarter of businesses are expecting to seek external finance in 2021 (British Business Bank). However, capital repayments will also commence for many businesses as we approach anniversaries for government supported schemes such as CBILS and CLBILS.
  • Alternative lenders such as asset finance providers and private debt funds continue to increase their market share and now provide an estimated 30% of SME finance, indicative of the growing flexibility, accessibility and appropriateness of financing solutions on offer.
  • A rise in leveraged buy-out activity involving UK companies has emerged in recent quarters, indicating both capital availability and appetite from the debt markets to support financial sponsors and acquirers, who continue to build strong positions in quality assets that have demonstrated Covid-19 resilience.
  • Whilst not addressed in the recent Budget or ‘Tax Day’, potential changes to Capital Gains Tax are likely to realign vendors’ priorities and flexible debt facilities can support the exit plans of business owners looking to ensure optimal value realisation prior to any potential changes taking effect.
  • The debt landscape is dynamic and continues to evolve on a regular basis, so prudent preparation in advance of approaching an effective and relevant funder pool remains key to a successful outcome.

To read the full report, click here.