Debt Placement / Recap

Stone Pier Capital provides Debt Placement / Recapitalization Services to a select group of clients.

Our familiarity and knowledge of the senior debt market and mezzanine debt market enables us to assist small to mid-size companies in restructuring their capital structure.

The capital structures of many small to mid-size companies have evolved over time. SPC can help you analyze your existing capital structure and determine if there is a more cost efficient allocation between types of debt, including maturities while also consolidating and clarifying debt covenants.

SPC has the experience to work closely with management to ensure the balance sheet recap is well defined, accretive and confidential, and can be closed within a reasonable timeline.

A successful debt placement / balance sheet recap involves…

  1. A deep understanding of the Company’s cash flow, balance sheet, customers, future plans, industry and credit markets.
  2. Proper planning.
  3. Careful screening of potential sources. (The “best” source of credit is sometimes not located in the same geographic area of the  company, but has a deep understanding of the industry.)
  4. Confidential outreach to appropriate capital sources.
  5. Coordination of the recap effort between SPC, Company Management and the Company’s counsel.
  6. Attention to detail in negotiating the deal.
  7. Careful, professional preparation of the transaction documents by your law firm with input and review by SPC.
  8. And last, but not least, a timely close to the transaction.

The debt placement / recap process, done in a disciplined, professional manner, will take three to six months, depending upon the size of the Company, the industry, the credit markets and other factors. A successful recap requires a commitment from the Board of Directors, and Senior Management of the Company.

Potential situations where your company may benefit include…

  1. Your Company has debt with several banks and ensuring compliance with debt covenants is problematic.
  2. Your Company has no debt and strong cash flow. Consideration may be given to borrowing in order to fund a dividend.  The benefit to the shareholder(s) is asset and estate diversification.
  3. Your Company is doing well, but needs to make a significant investment in cap ex. At this juncture, it is wise to consider the Company’s overall debt structure..

In addition to providing quantitative analysis, SPC maintains numerous relationships with banks and other capital sources and understands what terms and conditions are “market”, thus assisting management in completing an objective analysis.  The SPC team has been through numerous deals and is expert at working with banks and sources of capital of all sizes. We will coordinate the effort, keeping you informed the whole time and bringing key decisions to you for approval.

Interested Parties

Should you have an interest in exploring the potential recap of your Company with Stone Pier, please contact us for a no cost, confidential exploratory meeting.