A leveraged loan is a type of loan which is provided to companies that have assets that they can offer in order to borrow money.
If the amount borrowed is high relative to its equity then business is said to be highly leveraged. From a lenders point of view leveraged loans may be higher risk because if the borrower has borrowed a high proportion of its capital (relative to its equity) then on default the financier may not be repaid in full. Therefore a leveraged loan may be more costly to the borrower.
However, our experts will advise you that typically companies use a leveraged loan for the following:
- to acquire an asset;
- repurchase shares;
- make an acquisition;
- buy the business of another company;
- buy stock;
- refinance debt to longer term liability; or
- general corporate purposes.
Our leveraged loan team is known for being solution-driven and commercially aware.
Our expert team at Francis Wilks & Jones are here to help you with any clarifications that you may require in relation to leveraged loans. Our knowledge of leveraged loans is very broad and we have dealt with hundreds of enquiries on leveraged loans. Our practical daily experience and legal expertise means that we can assist whatever the nature of your enquiry.