Success factors in corporate debt financing

With a comprehensive view of funding and its proactive management, companies gain response time, ability to act and room for maneuver in negotiations.

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Key Takeways‍

• The integration of CS into UBS continues to shape the financing environment.
• Various banks are reaching the limits of their lending capacity in relation to capital regulations.
• The increase in credit supply provided by new players remains below the demand volume so far.
• Scarcity leads to higher margins for credit financing in the Swiss banking market.
• Base rate cuts only partially offset rising financing costs.

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In 2025, the financing environment for corporate clients is still heavily influenced by the fact that the Swiss business of Credit Suisse has been absorbed by UBS. In addition, many banks have almost reached the limits of their lending capacity compared to equity. An expansion of the credit supply and thus an intensification of competition from foreign banks, private debt or financing platforms has not yet had a significant impact. These facts have led to the expected tightening of financing options for corporate clients in Switzerland, across all industries. Credit margins have risen in line with the high demand for funding. This trend is likely to continue, if not intensify, due to the high level of investment pending in the “real” economy, f.e. in relation to energy transition and digitalization. The (expected) reduction in base interest rates (SARON, SWAP) can only partially alleviate the increasing financial burden on companies. These developments pose major challenges for corporate clients in their (re)financing.

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The following success factors are based on our many years of experience and allow us to create confidence and trust between companies, investors and financing partners.

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1. Stable, forward-looking and profitable business models are more than ever a prerequisite for successful corporate debt financing.
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2. Companies must understand their own debt capacity and reduce its utilization with appropriate measures (including improving operational efficiency, reducing net working capital, selling non-value-adding activities, and liquidating assets).
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3. Existing financing will not automatically be extended in the same amount and under the same conditions – borrowers will need convincing arguments (“debt story”).
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4. Sophisticated financing solutions and a diversified creditor mix are becoming increasingly important.
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5. Establishing (re)financing takes time and a structured process.

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Conclusion
In 2025, successful corporate funding will continue to rely on sound planning, resilient business models and a careful assessment of debt capacity. In the face of challenging market conditions, sophisticated financing solutions and a broad financing mix are becoming increasingly important. With a clearly structured process, companies can develop and successfully implement financing concepts for all market conditions.

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More information about Debt Advisory.