Beyond traditional financing: expanding access to capital through syndicated private credit structuring
Published: El Vocero de Puerto Rico (Link)
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Puerto Rico’s business community continues to transform. More and more companies are seeking to optimize their capital structure, refinance legacy debt, or access funding for growth. However, even with the progress of our financial markets, many mid-sized and expanding companies face limitations when trying to obtain financing solutions that respond to their complexity and scale.
In this scenario, syndicated private credit structuring presents itself as an alternative to traditional financing. Although widely used in developed markets, in Puerto Rico they still represent an underexplored resource with great potential for impact.
A syndicated loan allows several financial institutions to jointly provide credit to the same client. This allows companies to access higher amounts of capital, spread the risk among different stakeholders, and negotiate flexible structures tailored to their needs. In practice, they are especially useful when credit from a single institution falls short or lacks the required flexibility.
The growth of private lending institutions has expanded the options for midsize companies seeking capital outside the traditional banking system. Private syndications, also known as Club Loans or Private Credit Syndications, are increasingly common. These can be structured as unitranche facilities, split-lien schemes, or combinations of asset-based loans with term loans.
Since these instruments are custom-designed, they require a level of planning beyond what traditional commercial banking typically offers. Therefore, banks are not always the ones who originate them. However, experience shows that many institutions are willing to participate once the structure is defined and the credit package is properly prepared.
Local firms such as Sygnus Capital Puerto Rico already have the infrastructure and expertise necessary to offer formal advice on the structuring and management of syndicated loans. This means that companies do not have to face the process alone or rely solely on external actors. The advice begins by identifying the real objective of the transaction, whether it is to refinance debt, recapitalize the balance sheet, or raise funds for expansion. It continues with the design of a clear and viable structure that defines the term, guarantees, covenants, and risk distribution. It culminates with the presentation of the proposal to several financial institutions, generating a competitive environment that increases the client’s options.
The value of this model can be summed up in three key aspects. First, it brings clarity to the process, helping the company precisely define what it needs. Second, it ensures customization, because each transaction is tailored to the specific needs of the client and their industry. And third, it fosters competition, since involving multiple entities generates different offers, giving the client greater control over terms and conditions.
In a market like Puerto Rico, where access to capital can still feel limited, syndicated private credit structuring offers a path to new opportunities. They allow for a shift from bilateral negotiations with a single bank to a comprehensive and coordinated approach that connects companies with a broader range of financial resources.
This model also represents an opportunity for the broader ecosystem. Banks, advisors, investors, and business leaders can benefit from a more collaborative and transparent framework, where capital is better aligned with the goals of each business. As local capacity to advise and execute these transactions continues to strengthen, the efficiency and impact of each transaction on the economy will also increase.
At Sygnus, we understand that this is a step forward not only for our firm, but also for the country’s financial development. The more tools we have to connect capital with opportunities, the more resilient, dynamic, and competitive Puerto Rico’s economic ecosystem will be.
