Captive considers new funding sources and needs debt ratings guidance

SITUATION

The captive finance subsidiary of a global equipment manufacturer explored alternative funding vehicles. The client wanted The Alta Group to provide an independent assessment of the potential funding sources and in particular, their impact on the subsidiary’s debt ratings.

SOLUTION

Alta evaluated the various funding alternatives proposed by investment banks and determined the ratings impact would be detrimental to the company’s investment grade ratings. We then prepared a very focused rating agency presentation to review alternatives and elicit specific feedback for the Board of Directors. Using our highly specialized rating agency knowledge, we delivered clear advice and designed a ratings strategy that protected the investment grade rating. As a result, the client gained a better understanding of the rating agency hot buttons regarding alternative funding vehicles and avoided making a potentially damaging change in funding strategy.