LPC Law Notes Finance and Capital Markets Notes
A collection of the best Capital Markets and Loans* notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short, these are what we believe to be the strongest set of Capital Markets and Loans notes available in the UK this year. This collection is...
The following is a more accessible plain text extract of the PDF sample above, taken from our Finance and Capital Markets Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Advantages/Disadvantages Lending & Debt Securities (Borrowerโs Perspective)
Advantages of Lending
Quick
Can take less than 6 weeks
Cost
Cheaper to set up
Does not require underwriting
Confidentiality
Others do not have to know about it
Flexibility
Ability to draw down the loan
Repayments can be varied
Multi-currency option
Credit Ratings
A Company can have a low credit rating or uncertainty over cash flow in a loan
Although if the borrower is at investment grade then it will obtain more favourable terms in a loan agreement
Business relationships
Borrowers know who the lenders are
Advantages of Debt Securities
Lower interest rates
Normally 500 million is the minimum in the Capital Markets, but the large amount borrower does experience lower interest rates
There are more investors in the Capital Markets, therefore the risk is more spread out resulting in greater liquidity
The bonds are transferable
Regulatory costs are lower
Unsecured
Debt Securities are often unsecured
Less onerous
Minimum restrictive covenants
Investors do not have too much scope to negotiate
Liability
Joint & Several liability between the co-managers
Underwriting
Guarantee that the borrower will receive all its money
Financial Information
Borrower does not need to release a multitude of financial information to investors after the issue
Disadvantage of Lending
Restrictions
A borrower will be subject to a multitude of covenants, undertakings, warranties and indemnities that can restrict its functioning
There is little room for negotiation by the borrower
Financial Information
A bank will require a borrower to release various information to it before it will agree to lend
Secured
Higher interest rates
Regulatory costs of borrower
Mandatory fees of the bank
Disadvantages of Debt Securities
Business relationships
A borrower invariably does not know who its lenders are so cannot foster a business relationship
Rigidity
As a borrower does not know who its investors are, agreements are less flexible and there is little leeway on varying interest repayments
Credit Rating
A borrower...
Buy the full version of these notes or essay plans and more in our Finance and Capital Markets Notes.
A collection of the best Capital Markets and Loans* notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short, these are what we believe to be the strongest set of Capital Markets and Loans notes available in the UK this year. This collection is...
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