Advisor
What is the role of an Advisor in a financial transaction?
The term Advisor is used primarily in the context of structured finance transactions, such as project finance (e.g., wind farms, solar plants, digital infrastructure), asset finance (rolling stock, vessels, aircraft…), securitization (structured credit transactions).
It differs from a Financial Advisor in investment banking, who focuses on M&A, equity/debt fundraising or corporate restructurings.
The Advisor supports the client throughout the structuring of the financing, without acting as a lender. Its responsibilities cover several key dimensions:
1. Financial modelling
- Building complex financial models to simulate cash flows and assess the project’s debt repaying capacity.
- Defining financial covenants acceptable to both borrowers and lenders.
2. Financing structuring advice
- Designing the optimal financing structure, including instrument selection, sizing, target pricing and guarantees.
- Assessing the bankability of the transaction based on market conditions.
- Proposing an adequate legal and tax structure, in coordination with legal and tax advisors.
3. Coordination of Advisors and stakeholders
- Organizing due diligence processes with auditors, technical consultants and legal advisors.
- Coordinating with rating agencies, in collaboration with the rating advisory teams.
4. Negotiation with Lenders
- Preparing and organizing presentations to potential lenders.
- Leading the negotiation of financing terms and documentation.
- Structuring a lender syndicate for large-scale transactions.
- Supporting the client throughout to financial close.
An Advisor plays a pivotal role in the successful execution of structured finance transactions.
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