Twin Advisors & Partners has a consolidated experience in assisting European Minibond issuance. Since 2013 there is a constant track record on this market.
The use of MiniBonds can allow an important improvement in the financial management of companies linked to a higher debt diversification and a consequent mitigation of the risks associated with the strong dependence on banking channels.
The MiniBonds, moreover, usually issued with medium-long maturities, allow an extension of the average duration of the sources of financing of the enterprises. This lengthening can consequently generate greater consistency between the average maturity of the assets and the average duration of the liabilities, with a general improvement in the financial statement ratios which measure the consistency between the liquidity of the investments and the degree of collectability of the sources of financing . Overall, the MiniBonds guarantee the company credit stability for a medium-long period, without the risk of early requests to return from the credit lines.
The improvement of the company’s equity and financial balances could subsequently lead to more favorable assessments of the company’s creditworthiness by the banking system. The liquidity and financial structure ratios of companies represent important elements in the assessment area of the corporate balance sheet in the context of banks’ internal rating models. The use of MiniBonds can allow companies to appear more reliable towards the banking system, with a potential improvement of the rating rating attributed to them and a consequent increase in the potential for access to banking channels, at potentially lower prices.
Another of the advantages offered by MiniBonds is represented by the opportunity to periodically support, during the life of the loan, the disbursement of interest only on the financing obtained (Bullet), avoiding the company large cash outflows in the period in which the investments made have not yet generated adequate liquidity. Traditional forms of bank financing, on the contrary, are not typically of the bullet type and provide, already from the initial stages of the life of the loan, for the payment of installments including both an interest and a capital share.