Financing for Senior Corporate Debt

Senior debt typically carries the most favorable terms for a corporate borrower because of the security and repayment assurances it provides for the lender.

If a corporation has the resources to take on senior debt, Central State Financial LTD offers experienced advice and consultation on utilizing senior debt to finance mergers, to structure leveraged buyouts (LBOs), and for other purposes tied to a corporate or management business plan. We also assist on the placement of senior debt instruments with institutional and other investors that need solid fixed instrument investment assets for their portfolios.


Our senior corporate debt consultants combine an overview of the corporation’s business model and operations with multiple debt and equity options to determine the best structure that serves the client’s interests. For senior debt opportunities, we present a thorough picture of benefits and drawbacks and of how that debt will impact a client’s capital structure. Our access to multiple financing sources allows us to present senior debt structures with favorable interest rates and terms and conditions that do not hamstring a client’s operations or the use of funds for legitimate business purposes.

Central State Financial LTD advisors have developed structures for all forms of senior corporate debt, from investment grade to high-yield instruments. We gauge the market demand for a client’s debt instruments and develop debt structures that are in higher demand and that therefore impose lower interest rate obligations on the client.

Senior debt is often amortized over a five-to ten-year cycle. Rather than following a generic rule of thumb, our advisors prepare multiple “what if” scenarios to establish the optimum senior debt maturity dates in view of expected market conditions and economic and industry sector cycles.  

We also structure senior debt with both one-time and multiple tranche funding dates. Multiple tranche options frequently offer greater flexibility and more favorable terms as earlier tranches can be structured for payoff through successive amortizations. Central State Financial LTD also relies on its extensive international network of affiliate relationships to place senior corporate debt with public or private institutions which then use that debt to offset risks associated with holdings in hedge funds, ETFs, and private equity funds.

The Central State Financial LTD Approach to Senior Corporate Debt Process

Central State Financial LTD advisory role with respect to senior debt financing begins with an objective assessment of a corporation’s need for operating or investment capital and an analysis of whether that need will be better fulfilled through a debt or an equity offering. Equity might reflect a loss of ownership or control, but senior debt financing will impose terms and conditions that can influence corporate directions and decisions. If debt proves to be the better alternative, our senior debt advisors will structure loan covenants that offer optimum debt and cash flow ratios with the fewest possible restrictions. This can require a careful balancing of interest rates and points against positive and negative covenants and other loan terms and conditions.

We then apply our expertise to negotiate and manage other key loan terms and conditions:

  • which of the client’s assets and collateral will be pledged to secure the senior debt
  • if intangible assets (receivables, goodwill, etc) are used as collateral, how can the value of that collateral be measured to create the most favorable terms
  • will greater securitization lead to demonstrably more favorable interest rates over the duration of the debt financing
  • how should repayments be structured, e. interest-only or principal plus interest, balloon payments, etc.
  • how and to what extent can a client maintain control over loan collateral
  • how can we leverage our reputation and international presence to get the lowest interest rates and best terms and conditions for our clients
  • are floating or fixed rate coupons more favorable for management of payments in times of interest rate volatility
  • how can senior corporate debt be used to mitigate inflation and other external risks
  • can pricing volatility be used for a client’s short- or long-term benefit

In all senior corporate debt processes, our clients’ interests remain paramount. Nonetheless, our advisors must acknowledge and account for default risks and the potential loss of assets that are pledged to collateralize senior debt. Accordingly, a significant element of our senior corporate debt advice and consultation is planning and preparing for default events and helping our clients to mitigate those risks.

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110 North Wacker Drive
Suite 2500 - #1000
Chicago, IL 60606

+1 (888) 235-3660

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