Chapter 21
INVESTORS AND MARKETS : Other debt products

The main debt products are:

  • bonds (long-term market products);

  • commercial paper (short-term market products);

  • short-, medium- or long-term borrowings including RCFs and term loans.

    There are also other methods of financing based on assets of the firm:

  • discounting and factoring;

  • securitisation;

  • leasing and sale and lease back;

  • project finance.

Export credit is not per se a debt product as it will not generate a cash-in for the firm but is a way of avoiding unnecessary outlay of cash or to secure commercial relationships.

Debt documentation requires that the contracting company respect certain conditions (covenants) of which the major ones are financial covenants, financial decisions (restrictions on contracting additional debt, offering guarantees to other parties, share buybacks) and the control structure of the company.

Whatever their nature, banking or market, debt products increasingly have an ESG dimension either through the use of proceeds or through an interest rate whose level depends on the achievement of environmental, social or governance objectives.