Structuring Bank

In which transactions does a Structuring Bank operate?

A Structuring Bank plays a central role in structured finance transactions, which are by nature complex and require multidisciplinary expertise—financial, legal and tax. These operations include:

1. Acquisition financing and LBO transactions

The Structuring Bank advises its client on:

  • the mix of financing instruments (senior debt, mezzanine, equity, etc.);
  • the structuring of the legal and tax framework, often through the creation of an acquisition holding company;
  • the required guarantees, depending on repayment capacity and projected cash flows.

2. Project finance and asset finance

Whether for renewable energy, industrial plants, or transportation assets (trains, aircraft, vessels), the bank:

  • designs the target financial structure,
  • evaluates relevant financing solutions (e.g., leasing for asset finance),
  • defines the appropriate recourse or non recourse structure,
  • sets up a dedicated SPV (Special Purpose Vehicle) backed by project cash flows.

3. International trade finance

The Structuring Bank develops secured financing solutions tied to commercial contracts, including:

  • letters of credit ;
  • payment guarantees ;
  • structured trade facilities that mitigate counterparty and performance risk.

4. Securitization transactions

The Structuring Bank:

  • structures the transfer of receivables (e.g., mortgage loans) to investors;
  • separates risk tranches (senior, mezzanine, junior);
  • optimizes the client's overall cost of funding;
  • coordinates the creation and management of the securitization SPV.


What is the role of the Structuring Bank?

The Structuring Bank supports the client upstream, before execution, to build the most appropriate financial, legal and tax architecture for the transaction.

1. Strategic financial advisory

Based on a detailed analysis of:

  • cash flows;
  • debt capacity;
  • financial risks;
  • expected market conditions,

the Structuring Bank recommends:

  • the right financing instruments and their calibration;
  • the security package expected by lenders;
  • the optimal legal and tax structure, together with legal counsel.

2. Optimizing the financing

This high value added support allows the client to:

  • secure a more efficient financing structure;
  • reduce the overall cost of funding;
  • present a transaction aligned with lender expectations;
  • increase the likelihood of a successful syndication.

3. Participation in the financing

The Structuring Bank may:

  • participate directly in the financing;
  • receive a structuring fee ;
  • earn a margin on the portion of the financing it provides.

 

Examples of transactions where Societe Generale acted as Structuring Bank