Ron van Haeff
Director Interim Services
A refinancing does not start when the loan reaches its maturity date.
By then, the lender has already formed an opinion about the business. The quality of the forecasts, the covenant reporting, the communication and the company’s cash position have all shaped that opinion.
For many PE-backed companies, the refinancing conversation is moving closer. European market reports point to growing attention on debt raised in 2021 and 2022, when financing structures often assumed lower interest costs and stronger exit conditions. Refinancing activity already represents a large share of European lending, with borrowers seeking to extend maturities and prepare for a more selective credit market.
The calendar is not the problem
The problem starts when a company treats the maturity date as the first deadline.
A lender does not only want to know whether the company can repay or refinance the debt. The lender wants to understand how the business generates cash, how much room exists under the covenants and how management responds when the forecast changes.
That requires reliable information.
The treasury team should be able to explain:
- the group’s liquidity position by entity and currency
- the expected cash balance over the next 13 weeks
- covenant headroom under different scenarios
- upcoming debt, interest and amortisation payments
- available facilities and undrawn commitments
- the impact of acquisitions, capex and working capital on cash
If these answers take weeks to produce, the refinancing process has already started from a weak position.
Why treasury matters to the lender story
A refinancing is often presented as a financing project. It is also a test of financial control.
Lenders want evidence that the management team understands its cash flows. Sponsors want confidence that the company can fund its plan. The CFO needs to present a clear and consistent picture to both groups.
Treasury sits at the centre of that process. It connects the bank accounts, the forecast, the debt structure and the daily decisions that affect liquidity. It also identifies problems before they appear in a monthly management report.
This work becomes harder when the business has grown through acquisitions, operates across several countries or relies on manual reporting. A portfolio company can have strong commercial performance and still struggle to explain where its cash will be in six weeks.
Start earlier than feels necessary
A sensible refinancing plan starts at least 12 months before maturity. It begins with a review of the existing facilities and the quality of the available data. It tests the forecast against lower sales, delayed collections, higher interest costs or an acquisition that closes later than planned.
It also gives the company time to fix weaknesses. Bank account data can be consolidated. Reporting can be standardised. Covenant calculations can be documented. The company can approach lenders with facts rather than urgent explanations.
A permanent treasurer may be the right answer for an established group. A refinancing project may call for an interim treasurer with direct experience of lender processes, covenant reporting and debt negotiations.
The best refinancing discussions start before the company needs new money.
Treasurer Search places interim and permanent treasury professionals in PE-backed companies across the Netherlands, Belgium, Germany and Luxembourg. If the debt maturity is on the calendar, the treasury work should already be underway.
