Background

A major international charity with iconic UK visitor attractions needed a cost-effective debt financing solution to maintain liquidity during the COVID-19 pandemic.

FRP was engaged to help negotiate a competitive and flexible financing package that would enable the charity to meet its immediate funding needs, support essential capital expenditure, and provide operating headroom to weather any potential and sustained reduction in visitor numbers linked to the pandemic.

Action

Our Debt Advisory team assisted in negotiations with the proposed finance provider to ensure the charity could meet its immediate and mid-term funding needs. They were directly involved in negotiating a detailed term sheet and a covenant proposal that minimised drawdown restrictions (the charities access to credit funds) and funding costs, while providing maximum flexibility to cope with any future volatility in visitor numbers. Our team also prepared a Section 124 report under the Charities Act on behalf of the Trustees to support completion of the financing.

Outcome

The FRP team supported the charity to secure highly cost-competitive terms from the charities and public sector department of a major UK bank. The negotiated solution delivered a one-stop revolving financing structure providing the necessary mid-term liquidity, alongside specific financial carve outs that enabled the charity to continue its activities without significant operational restrictions.