Staple Financing

The term Staple Financing ( also: Stapled Finance, staple financing package) a financing package and a financing commitment is called in investment banking, which is arranged by banks on behalf of the seller in the form of corporate sales and is made possible buyers.

Term origin

The term " Staple Financing " in German roughly translatable as " Beige Prestitched financing," is derived from the process of creating the documentation components that provides an investment bank at a consultation of the seller in an M & A transaction, potential buyers. In this case the Prospectus will (also called information or Offering Memorandum ), with details on the company offered, Beige attached a written financing commitment.

Definition

The funding commitment to corporate takeover or parts of a business at Staple Finance is generally after a bidding process each successful bidder available. The successful tenderer will but accept no obligation this funding. The financing commitment is usually very early in an M & A transaction, so that the acquirer may consider early enough how high leverage, ie the ratio recorded debt to assets of the potential acquisition or the market value of the potential acquisition is. In the financing commitment, the terms of the loan as term, interest rate, covenants, etc. are recorded accordingly.