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Debt Capital Markets Review Q4 2020

19 November 2020

Gambit Corporate Finance LLP is pleased to announce the publication of its Debt Capital Markets Review for Q4 2020.

The report examines the latest developments in the debt markets, including insight into the domestic lending landscape and the latest movements in mid-market valuation and leverage multiples.

To read the full report, please click here.

Gambit's award winning debt advisory team has been assisting many businesses with their Covid-19 action plans and CBILS/CLBILS funder discussions, stress testing their forecasts and providing guidance on funding availability and how to approach funders for support. The firm is proud to have maintained a 100% C(L)BILS success rate (against a wider market success rate of 50%).

Report Summary:

  • Statistics for the key government backed loan schemes continued to show strong levels of utilisation and the Treasury’s decision to extend these out to January 2021 prolongs the availability of a vital source of liquidity for those that have not yet applied.
  • As mainstream banks’ attention continues to be focused on supporting corporate clients’ immediate cash needs, M&A activity will continue to be sustained by the support of alternative funders, but approaching the right funder pool is key.
  • With a high concentration of maturities set to arise in 2021, lenders expect to see a relatively large refinancing wall in 2021.
  • Given auditors' requests for 18 months of liquidity to sign off as a going concern, lenders are bracing for a busy six months of refinancing as businesses look to demonstrate a sufficient solvency level.
  • The debt markets have become further polarised, with strong competition amongst lenders for businesses that have performed well through Covid-19 and such assets are largely being funded at pre-pandemic levels.
  • The majority of direct or alternative lending deals continue to be M&A related, with 67% of UK and European raises being used to fund a buy-out, with ample levels of dry powder serving to buoy short term M&A activity.
  • The envisaged changes to CGT may lead to an acceleration of sellers in the market, creating a value maximisation opportunity for business owners to benefit from tax relief and buyers to capitalise on a rise in available assets.
  • The debt landscape continues to evolve on a weekly basis and it is best practice to speak with a specialist corporate debt advisor to establish the latest position on what is likely to be achievable.