Challenge
The major shareholder of a company was going to be funding a proposed credit facility. The board of directors needed to know whether the transaction would be far, from a financial perspective, to the holders of existing senior notes on the company.
Solution
We were engaged to provide an opinion as to the fairness of the transaction. Our analysis included an assessment of the negotiation process, identification of comparable publicly traded debt facilities, a comparison of proposed debt terms with public, private, and existing debt facilities. We also determined the appropriate credit rating and evaluated market reaction to the proposed transaction. We concluded that the proposed transaction was fair, from a financial perspective, to the holders of existing senior notes on the company. We also concluded that the terms of the proposed transaction were no less favorable than would have been obtained in the public market.
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