What are the methods of raising finance? When a corporate entity needs to raise finance, it must first decide 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 entity wishing to raise the finance. For information on the differences between raising money by raising debt from creditors and raising money by issuing shares, see Practice Note: Key features of the debt capital markets—Debt securities and equity compared. Loans versus debt securities Loans come in a wide variety of forms. A simple and very common type of loan is an overdraft. Other common types of loan in commercial financing are term loans and revolving credit facilities. Loans can be provided by one lender (bilateral) or multiple lenders (syndicated or club deals) and they can be secured or unsecured. They can be used for long-term or short-term financing.

STOP PRESS: The UK’s prospectus regime is currently based on the EU Prospectus Regulation, which was retained in UK law after Brexit as the UK Prospectus Regulation. The UK has been reviewing its prospectus regime as part of wider efforts to reform the capital markets in the UK and enhance the attractiveness of the UK as a listing venue. As part of this, the UK Prospectus Regulation will be replaced by the Public Offers and Admission to Trading Regulations 2024 (the POATRs), with all detailed requirements relating to admission to trading to be covered in Financial Conduct Authority (FCA) admission rules. The FCA published its final rules (PS25/9) on 15 July 2025. The new rules are expected to take effect on 19 January 2026. For further information on the key elements of the new framework established by the POATRs which are relevant in the debt capital markets space, see Practice Note: The UK Prospectus Regulation—essentials [Archived] — Reform of the UK prospectus regime. This Practice Note provides quick answers, where relevant, and links to more detailed answers

This Practice Note sets out certain key cases and associated analysis relevant to debt capital markets practitioners. The cases are divided by topic area and include: • Bonds as negotiable instruments • Contractual and tortious obligations in debt securities transactions • Majority bondholders binding minority holders • Standing and enforcement rights of beneficial owners • Actions against and rights of trustees, agents and intermediaries • Interpretation of trust deed clauses • Interpretation of non-trust deed clauses • Insolvency and restructuring • Jurisdiction, governing law and agency in international bond disputes • No action clauses • Misrepresentation • Prospectus issues, and • Rating Bonds as negotiable instruments Names of parties Judgment date Case summary Analysis Edelstein v Schuler & Co [1902] 2 KB 144 9 May 1902 Certain debenture bonds, some issued by an English company in England and others by foreign companies abroad, and expressed to be payable to bearer, and not being promissory notes, were stolen from the plaintiff by his clerk. For the purpose of selling the bonds, the clerk

This Practice Note is concerned with simple contractual debts which usually arise in the course of commercial transactions. It does not provide guidance on debts in the following contexts: • banking and mortgages, which are discussed in detail in Lexis+® UK Banking & Finance (see Practice Note: Banking & Finance—new starter guide and related content) • consumer debts, which are addressed in Lexis+® UK Financial Services (see eg: Consumer credit agreements—overview and related content) • rent arrears, which are discussed in Lexis+® UK Property Disputes (see eg: Recovering rent arrears and related content) Note: this Practice Note does not discuss the provisions of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, SI 2020/1311. Those regulations have only limited application to business debts, but, if the debtor in your case is an individual, it is worth ascertaining whether the Debt Respite Scheme applies to their circumstances. See further: LNB News 16/07/2020 36—The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) and LNB News

This Practice Note provides guidance on the interpretation and application of the relevant provisions of the CPR. Depending on the court in which your matter is proceeding, you may also need to be mindful of additional provisions—see further below. This Practice Note provides guidance on the pre-action steps a court would normally expect a party to have taken before commencing a contractual debt claim. In particular, it sets out the approach anticipated by the Pre-Action Protocol for Debt Claims (Debt Protocol), which may apply to debt claims brought by a business (including a sole trader or public body) against an individual (including a sole trader), as well as under the Practice Direction Pre-Action Conduct and Protocols (Practice Direction), applicable for most other debt claims. For further guidance on debt claims, see: • Practice Note: Starting a contractual debt claim—a practical guide • Practice Note: Debt claims • Practice Note: Discharging a contractual debt • Starting a contractual debt claim—checklist For more general guidance on: • alternative dispute resolution (ADR), see: ADR and dispute resolution clauses—overview • starting

The raising of capital by the issuance/sale of debt instruments such as bonds.

Restructuring transaction where creditors agree to swap all/part of their debt for equity in the restructured entity.

A popular restructuring method is a debt for equity swap; financial creditors receive equity in the restructured vehicle in return for reducing or cancelling their debt claims against the company (and the rest of the group). Many highly leveraged deals have thin equity cushions and existing shareholders often may find themselves ‘out of the money’. The debt for equity swap reduces balance sheet liabilities and allows lenders to take some of the upside following a restructuring once the company returns to profit (as equity holders, entitled to dividends once there are sufficient distributable reserves) or on any subsequent sale. The valuation will show where value breaks; that tranche will expect to receive the most equity post-restructuring (see Practice Note: Where the value breaks and negotiating strength). The corporate rescue exemption found in section 322(5E) of the Corporation Tax Act 2009 (CTA 2009) may reduce the popularity of the debt to equity swap as a restructuring tool. The debt to equity swap was often used to take advantage of an exemption in CTA 2009, which

Introduction Part 5 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) introduced new regimes for debt management and relief, although not all of them have been implemented. While these regimes are aimed at enabling individuals to manage their debt more effectively, there are clearly implications for creditors seeking to enforce judgments against such individuals. • by amendment to the County Courts Act 1984, TCEA 2007, s 106 introduced a new form of administration procedure for debtors who do not have any business debts and whose income exceeds the amount required to meet their reasonable needs. TCEA 2007, s 106 has yet to be implemented • by amendment to the County Courts Act 1984, TCEA 2007, s 107 introduced a provision for a debtor suffering from a ‘sudden and unforeseen deterioration in their financial circumstances’ to apply for an enforcement restriction order (ERO). TCEA 2007, s 107 has yet to be implemented • by amendment to the Insolvency Act 1986 (IA 1986), TCEA 2007, s 108 introduced debt relief orders (DROs) as an alternative

Plan where a Debtor’s debts are in effect combined and debtor pays monthly payment to a debt management company, which then pays on Creditors.

Where debt held by a holding company is repaid by the holding company and re-borrowed by a subsidiary (normally this is notional and done through accounting entries). Debt pushdowns are common on acquisition finance transactions and will typically be performed for tax reasons or to enable the lenders to take security at the operating company level without breaching capital maintenance restrictions.

A recently introduced non-court based alternative to bankruptcy and an individual voluntary arrangement for insolvent individuals that is primarily aimed at individuals who cannot afford the fees associated with those procedures.