Debt capital market finance versus loan finance
Debt capital market finance versus loan finance

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Debt capital market finance versus loan finance
  • Methods of raising finance
  • Loans versus debt securities
  • What are the primary differences between loan finance and debt securities financing?

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—Brexit planning and impact—key issues for debt capital markets transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.

Methods of raising finance

When a corporate entity needs to raise finance, its first choice is whether to carry this out by means of raising debt from creditors or by issuing shares in the equity market. This choice will be driven by a number of factors including the wishes and requirements of potential creditors/investors and the nature of the