What’s on your mind?

• The borrower’s financial position has recently significantly deteriorated.
• Scheduled interest and principal repayments exceed the cash flows generated by the borrower’s business.
• The borrower breaches the financial covenants or is expected to breach them in the near future.
• The borrower’s integrity is unclear.

Your questions

• Why has the borrower’s financial position deteriorated?
• Are any funds being channelled out of the business?
• How robust are the borrower’s forecasts?
• Which factors affecting cash flows are under the borrower’s control, and which are not?
• Can the loan be refinanced?
• Can the security be foreclosed?
• Can the debt be converted to equity in the company?
• Can the debt be sold?
• What realistic debt servicing and repayment arrangements may be adopted given the borrower’s current financial position and forecasts for the future?

 

How KPMG can help