Calculator
Breakeven of a refinancing
The calculator sets the margin saving of a refinancing against its costs at signing. It gives the discounted net gain, the breakeven year and the net gain if the new debt is repaid earlier.
Discounted net gain
€1.26m
over the remaining tenor, after costs
Breakeven
Year 3
first year in which the net gain turns positive
Discounted savings cover the refinancing costs during year 3. An exit before that date leaves the refinancing at a loss.
| Prepayment penalty | €0.60m |
|---|---|
| Arrangement fee | €0.90m |
| Hedge break | €0.40m |
| Total cost at signing | €1.90m |
| Exit at end of year | Margin saving for the year | Cumulative discounted savings | Net gain on exit |
|---|---|---|---|
| Year 1 | €0.75m | €0.71m | €-1.19m |
| Year 2 | €0.75m | €1.38m | €-0.52m |
| Year 3 | €0.75m | €2.00m | €0.10m |
| Year 4 | €0.75m | €2.60m | €0.70m |
| Year 5 | €0.75m | €3.16m | €1.26m |
The initial values are a sample input to replace with the terms of your debt and of the refinancing offer. This calculation gives an order of magnitude and does not bind any lender.
Method
The calculation formulas
The new debt takes over the outstanding amount and its repayment schedule. The base rate is the same on both sides and drops out of the calculation. Costs are paid at signing and the savings of each year are discounted at the rate entered.
Costs at signing
Costs = outstanding amount × (prepayment penalty + arrangement fee) + hedge break cost
Saving for the year
Saving = principal outstanding at start of year × (current margin − proposed margin)
Breakeven
Breakeven = first year in which the sum of discounted savings exceeds the costs at signing
Example
Worked example
A €60.0m bullet loan has 5 years left to run with a margin of 4.50%. A refinancing offer proposes a margin of 3.25%, a saving of €0.75m a year. The prepayment penalty, the arrangement fee and the hedge break cost €1.90m at signing. Discounted at 6.00%, the savings cover these costs during year 3. The discounted net gain reaches €1.26m if the debt runs to maturity. An exit at the end of year 1 leaves a loss of €1.19m. The data in this example are sample inputs.
Benchmarks
Refinancing in the activity of private debt funds
| Transaction type | Transactions 2025 | Amounts 2025 | Share of 2025 amounts | Amounts 2024 |
|---|---|---|---|---|
| Refinancing | 94 | €6,275m | 42% | €2,641m |
| Buyouts | 123 | €5,138m | 34% | €5,314m |
| External growth | 70 | €2,658m | 18% | €3,131m |
| Organic growth | 28 | €686m | 5% | €500m |
| Asset finance | 27 | €94m | 1% | €42m |
| Total | 342 | €14,849m | 100% | €11,628m |
Scope: corporate debt excluding infrastructure, activity in France of French and foreign funds.
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