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The client, an Investment Banker was conducting a transaction to refinance the debt of a company in the Artificial Intelligence industry. The public company wanted to financially restructure itself to expand in North America and to manage its debt instruments better – it had 31 loans which provided administrative challenges. The company was to refinance all of its current debt to mezzanine. The client wanted the TresVista team to tailor this deal to suit the needs of multiple stakeholders. Since the output was to be customized for approaching different investors, the clients required the team’s support over and above the usual investment documents – such as the transaction comparables, CIM, and a one-page summary.
To create a financial model for raising debt and calculating warrants to be provided to investors due to the high risk associated with the debt.
The TresVista team followed the following process:
The major hurdles faced by the TresVista team were:
The TresVista team overcame these hurdles by ensuring the components which made the transaction complex were suitably separated into the Warrant calculations, Debt Schedule and Loan Summary tabs. Post building the necessary tabs, various iterations were tried to arrive at the PIK duration and the number of Warrants to be issued.