Refinancing in a Capital Constrained Environment

Over the last three years, companies have faced multiple challenges that have adversely impacted performance – ranging from COVID-related effects, macro-economic events, and geo-political instability. Many of these impacted businesses are now faced with higher than expected leverage and more limited access to capital. This economic environment has also reduced opportunities for M&A. However, in an environment where loans cannot be extended and exits are not being achieved, some investors in specific situations may still require an exit.

Where lenders are requiring the borrower to repay then Pricoa Private Capital can be a source of refinancing capital. We continue to be in the market with a consistent appetite for financing committed sponsors and fundamentally sound portfolio companies. Alongside our flourishing LBO financing activities, we are open to refinancing situations where there may be elevated leverage or a forthcoming maturity, often in time compressed circumstances. Our hybrid unitranche lending solution can bring material capital, at market pricing levels and in line with existing financing terms.

With a patient approach and cost competitive capital, we have the capacity and resources to grow as a financial partner for our portfolio companies. Our decades-long history of investing Senior and Junior Capital for middle-market companies demonstrates our experience as a trusted advisor to portfolio companies navigating through challenging times.

Below we highlight a recent transaction that helped facilitate the refinancing of an incumbent lender:‍

UK Company refinances incumbent lender with Junior Capital

The Company is a portfolio company of private equity firm, which first backed the Company in 2017.

In December 2022, we provided a one-stop funding solution to support the refinancing of an incumbent lender.

The Company chose to work with us as their new financing partner given a constructive, flexible and thoughtful approach that is reflective of our long-term relationship approach to providing capital.

Our Approach

Pricoa Private Capital is one of the largest private debt providers globally with US $98.6 billion of investments across 15 international offices. In the UK, we have a long history of partnering with businesses and currently have more than $11 billion invested across over 120 companies and institutions in a wide range of sectors (as of 31.03.23).

Our bespoke funding capabilities include Senior Notes, where we invest across the entire credit quality spectrum, and Junior Capital including Subordinated Notes and Structured Equity. Pricoa is a buy-and-hold investor, with investments starting from £10 million to larger hold sizes in excess of £300 million.

We have a relationship-centric approach and partner with management teams by providing long-term patient capital to fulfil strategic objectives, diversify funding sources, fund growth capex or acquisitions, and facilitate shareholder transitions. Our teams are focused on regional markets and maintain direct relationships with a wide range of institutions, across FTSE 350 companies, privately-owned mid-market businesses, non-public institutions and charitable entities. To learn more about our junior strategies visit our mezzanine and direct lending pages.