Case Study — June 3, 2026
Powering Deal Advisory with Connected Credit and Ratings Insight
How investment banks can structure financeable transactions, protect ratings, and maximize funding capacity across complex deals.
SEGMENT:
Investment Bank
WORKFLOW:
Deal Advisory and Structuring
Investment banks play a critical role in advising corporates and sponsors through mergers, acquisitions, divestitures, and financings—where deal success hinges on the ability to structure transactions that are both strategically compelling and credit sound. Deal advisory teams sit at the intersection of strategic advisory, credit analysis, and capital markets, evaluating how proposed transactions will impact leverage, liquidity, credit quality, and ratings outcomes before execution.
As transaction activity becomes more complex, spanning leveraged buyouts, large scale M&A, and cross border financings—banks are under increasing pressure to provide rapid, high confidence advice while navigating volatile market conditions. Successful execution requires more than static financial models; it demands a forward-looking, scenario driven view of credit impact, capital structure resilience, sector dynamics, and market sentiment.
A modern deal advisory workflow brings together credit, ratings, market, and macro intelligence into a connected process. This enables investment banks to assess feasibility, optimize structures, and support issuers with credible, data driven narratives that withstand agency review and investor scrutiny.
Investment banks face several structural challenges that complicate deal advisory and structuring in today’s environment.
The Challenge
First, unclear credit headroom makes it difficult to assess how much leverage a transaction can support without triggering adverse rating actions. Without a clear view of downgrade thresholds, teams risk overleveraging structures that undermine funding costs, investor access, or long term financial flexibility.
Second, capital structure decisions are often made with limited sensitivity analysis. Traditional models may not fully capture how leverage, liquidity, or covenant flexibility responds under downside macroeconomic, sector, or market scenarios—masking risks that only surface late in execution.
Third, misalignment with rating agencies introduces execution risk. Differences between internal assumptions and agency methodologies can lead to unexpected rating outcomes, forcing last minute restructuring, repricing, or delays during critical stages of the deal.
Fourth, fragmented peer, sector, and market data weakens deal narratives. Advisory teams frequently rely on disconnected sources for credit benchmarks, peer comparisons, and market signals—making it harder to position transactions credibly with investors.
Finally, sector specific and cross border risks can introduce hidden vulnerabilities. Without fully integrating macro, political, and sovereign considerations into deal analysis, transactions may appear viable on paper, but face execution challenges as conditions evolve.
The Solution: A Connected Deal Advisory & Structuring Workflow with S&P Global Market Intelligence’s Risk & Valuations Services
Investment banks can address these challenges by adopting an integrated deal advisory workflow that connects credit impact modeling, ratings analysis, capital structure optimization, and market intelligence into a cohesive process.
This approach embeds forward-looking risk assessment early in transaction planning, applies consistent analytical frameworks across advisory and execution teams, and aligns internal decision making with rating agency and investor perspectives. By linking feasibility analysis, structuring decisions, and market signals, banks can support faster, more confident execution—without sacrificing discipline or credibility.
|
1) Feasibility: Transaction Credit Impact & Deal Viability |
The Challenge At the outset of a transaction, deal teams must quickly determine whether a proposed structure is financeable without compromising credit quality or triggering adverse rating actions. Limited visibility into true credit headroom, peer positioning, and leverage tolerance can result in over ambitious structures or late-stage course correction. The Solution Advisory teams can assess transaction feasibility by modeling credit impact under proposed deal scenarios—evaluating leverage, liquidity, and balance sheet resilience relative to rated peers. By simulating how different transaction sizes and structures affect credit metrics, banks gain early clarity on how much debt a deal can realistically support. Impact Clear go /no go decisions earlier in the process, better calibrated deal sizing, and greater confidence that transactions are financeable before entering execution. |
|
2) Ratings: Expected Outcomes & Agency Alignment |
The Challenge Uncertainty around post deal rating outcomes introduces significant execution risk. Misalignment between internal assumptions and rating agency methodologies can lead to surprises late in the process, undermining market confidence and increasing the risk of repricing or delay. The Solution Advisory teams can forecast potential rating outcomes under multiple leverage and liquidity scenarios, aligning internal analysis with established agency benchmarks and historical rating behavior. Preparing management with data driven, defensible talking points strengthens engagement with rating agencies and improves transparency throughout the review process. Impact Reduced rating risk, smoother agency discussions, and increased issuer credibility—helping transactions proceed with fewer last-minute adjustments. |
|
3) Structuring: Capital Structure & Financing Strategy |
The Challenge Deal structures that appear viable under base case assumptions may prove vulnerable under stressed conditions. Insufficient sensitivity analysis obscures downgrade triggers, funding cost implications, and covenant pressure—potentially exposing issuers and underwriters to unnecessary risk. The Solution By stress testing alternative capital structures across macro, market, and rating scenarios, banks can identify downside risks before commitments are made. Comparing different debt, equity, and hybrid mixes enables teams to optimize funding strategies while preserving target ratings and aligning with investor demand. Impact More resilient capital structures, lower funding costs, and improved confidence that deals will perform as intended across a range of market conditions. |
|
4) Insight: Market, Sector & Cross Border Context |
The Challenge Fragmented market, sector, and country data weakens deal narratives and limits the ability to anticipate risks tied to economic cycles, investor sentiment, or geopolitical exposure—particularly in cross border transactions. The Solution Integrating sector outlooks, macroeconomic forecasts, market signals, and country risk analysis into deal evaluation provides a unified, forward-looking view. Strategic peer comparison and real-time market insight ensure advisory assumptions remain grounded in prevailing investor expectations and sector realities. Impact Stronger, more credible deal stories; reduced execution risk; and structures that are better aligned with both market conditions and long-term sector fundamentals. |
Conclusion
By moving from fragmented analysis to a connected deal advisory workflow, investment banks can structure transactions with greater confidence, speed, and discipline. Integrating credit impact modeling, capital structure optimization, ratings insight, and market insight enables advisory teams to anticipate risks earlier, align more closely with external stakeholders, and execute deals that stand up under scrutiny.
In an environment defined by market volatility and heightened sensitivity to credit risk, modernizing deal advisory is not just about better modeling—it is about enabling smarter, more defensible transactions that protect ratings, maximize funding capacity, and support successful execution from announcement through close.