Glossary
Refinancing
Refinancement
Refinancing replaces existing debt with new financing, from the same lenders or new ones, to change its maturity, cost, lenders or covenants.
Definition
Refinancing means repaying existing debt with new financing, to extend the maturity, reduce the cost, change lenders or loosen the covenants. A company that owes €20m or more refinances a syndicated loan, acquisition debt, a Euro PP or mezzanine debt, either with its current lenders through an amend and extend or with new lenders. In France, refinancings accounted for 42% of the amounts invested by private debt funds in corporate debt in 2025, compared with 23% in 2024. France Épargne Corporate’s Refinancing corporate debt page presents the figures for this market and the private debt funds that refinance these transactions.
Worked example
A mid-sized company repays a €90m syndicated loan maturing in eighteen months with €110m of unitranche debt over seven years from two private debt funds. The additional €20m finances an acquisition.
Points to check
- The timetable: a refinancing is prepared before the maturity falls within one year.
- The cost of exiting the existing debt, including the prepayment fee.
- The comparison between an amend and extend with the current lenders and new lenders.
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