Debt advisory as a banking service

When it comes to advisory services, it is no longer just the Big Four and boutique consultancies that are competing. Banks are also increasingly offering advice on the structuring of debt financing. But what is the added value and how do the services differ?

Banks as new players

The financing environment is currently difficult. Inflation and geopolitical conflicts are creating an uncertain financial policy situation for companies that also need to make urgent investments in infrastructure or restructure their business models to make them more sustainable. In order to obtain the necessary debt capital, companies therefore need to be particularly convincing to their investors and banks.

At this point, companies usually turn to business consultancies such as the Big Four or specialized boutiques. The demand for debt advisory services has grown steadily in recent years, not least due to the increasingly ambitious market environment. Recently, however, some banks have also specialized in offering their clients precisely these advisory services, regardless of whether they ultimately also appear as financiers. 

This initially has the advantage for the bank that it can generate additional fee income by providing additional services and advice within a defined mandate. At the same time, companies benefit strongly from the (credit) experience gained in the relevant industry sectors of the advising institution on the one hand, and from the insights and analytical approach and potential credit requirements of the various investors on the other. Sector expertise and the constant dialogue with investors across a wide range of financing instruments are particularly valuable when it comes to holistic and integrated debt capital advice. In addition, main benefit for companies is the bank’s "one-stop shop" offering, i.e. it knows what is important to investors and lenders in specific situations. This can be a decisive advantage in successfully concluding the financing.

Debt Advisory at ING

ING has been offering Debt Advisory since 2021 but can already look back on some very successful mandates. In addition to a strong presence in the telecommunications, media and technology (TMT) sector, ING has also successfully implemented transactions in the energy and transport & logistics sectors. In 2021, for example, ING advised the GlobalConnect Group for the first time together with another bank as Debt & Sustainability Advisor in the course of its EUR 2.7 billion refinancing. In the following year, ING repeatedly supported the client in raising additional debt by arranging incremental facilities for GlobalConnect in the amount of EUR 1 billion. The financing was used for the long-term growth of the group and the increased expansion of the digital infrastructure in the Scandinavian countries. Both financings were linked to ESG targets, which underline GlobalConnect's ambition to achieve its sustainability goals it has set and communicated.

ING also advised Deutsche Glasfaser together with another bank in 2021 on the largest financing for fiber optic expansion to date. The EUR 5.75 billion transaction was also linked to sustainability criteria, which were developed by ING as Sustainability Advisor in close cooperation with the client and supports the company in its goal of increasing the number of fibre-connected households to four million by the end of 2025.

For both mandates, the companies were able to rely on ING's in-depth expertise in the TMT sector and sustainable financing. This expertise, coupled with many years of experience in the capital and credit market business and the handling of complex financing processes, are critical success factors when it comes to optimizing financing structures. However, the best expertise would be worth nothing if ING could not count on its long-standing and trusting business relationship with its corporate customers, as ING knows what is important to its clients and which financing requirements and preferences need to be taken into account. Companies can therefore continue to rely on ING's sound advice in the future.