A holding company and its operating subsidiaries are not one borrower. Each entity answers to a different regulatory perimeter, lender universe and pricing logic, which means a cross-border lending group has to be placed as several transactions rather than one.
Why a single group process with a single deck fails both sides
A cross-border lending group is often presented to the market as a single credit story, with one deck and one set of consolidated financials, because that is how the group thinks of itself internally. Lenders do not evaluate it that way, because each entity in the structure — the holding company and each operating subsidiary — sits behind a different regulatory perimeter and a different set of legal remedies.
A single process built around consolidated numbers forces every prospective lender to first disaggregate the group before they can even begin their own credit assessment, which adds friction and time to a process that is usually trying to move quickly, and it obscures entity-specific risks that a lender needs to see clearly to price correctly.
The practical fix is to treat the group financing as several linked but separately structured transactions from the outset, each with its own deck built around the entity's own financials and its own applicable lender universe, rather than retrofitting one consolidated pitch after the first lender asks for entity-level detail.
Holdco senior: security over share pledges and intercompany loans
Financing raised at the holding company level is typically secured against share pledges over the operating subsidiaries and against intercompany loan receivables, rather than against the operating assets themselves, which sit at the subsidiary level and are usually already pledged or restricted under local facilities.
This structure has real limits. A share pledge is only as valuable as the enforceability of that pledge in the subsidiary's home jurisdiction, and an intercreditor agreement between the holdco lender and any operating-entity lenders determines what a holdco lender can actually do if it needs to enforce, which is often considerably less than the security description implies at first read.
Holdco senior lenders price this residual, structurally subordinated position accordingly, and a group that understands this in advance can set expectations correctly rather than being surprised by pricing that looks high relative to the group's consolidated credit quality.
Operating entity: local currency, ECB routes, and domestic lender appetite
Each operating subsidiary in a cross-border lending group typically needs local-currency funding to match its local-currency lending book, which points towards domestic lenders who understand the local regulatory environment and are comfortable with local currency risk, rather than the international lenders more naturally suited to a holdco facility.
Where an operating entity is structured as an NBFC or equivalent regulated lender, external commercial borrowing routes may be available for cross-border funding into that entity, but these routes carry their own regulatory conditions on end-use, tenor and pricing that have to be checked against the specific jurisdiction before they are assumed to be usable.
Domestic lender appetite for a given operating entity also depends on that entity's own standalone track record and reporting history in that market, independent of the group's overall reputation, which means a strong parent does not automatically translate into strong terms at the subsidiary level.
Sequencing — which tranche should close first and why
Sequencing matters because each tranche's terms can influence the next. Closing the holdco senior facility first, with clear terms on the share pledge and intercompany loan security, gives operating-entity lenders certainty about what sits above them in the structure, which generally makes the operating-entity process faster and cleaner.
Closing an operating entity facility first, without the holdco structure finalised, risks having to renegotiate security or intercreditor terms once the holdco facility is subsequently structured, particularly if the holdco lender wants security over the same intercompany loan the operating entity has already pledged or restricted in some way.
There is no universal answer, and the correct sequence depends on which tranche has the more time-sensitive funding need and which entity's lender universe is more sensitive to structural uncertainty elsewhere in the group, but the sequencing decision should be made deliberately rather than falling out of whichever process happens to move fastest.
Managing two diligence packs without contradicting yourself
Running parallel diligence processes for the holdco and one or more operating entities means the same underlying group information — consolidated financials, group structure charts, intercompany agreements — appears in multiple diligence packs prepared for different lender audiences, and any inconsistency between those packs is the fastest way to lose credibility with both.
We maintain a single source document for group-level facts, referenced consistently across every pack, and update all packs simultaneously whenever a term changes in any one process, rather than allowing each workstream to be updated independently by whoever is managing that specific lender relationship.
This coordination is a project management discipline as much as a financial one, and groups that underinvest in it typically discover the inconsistency only when a lender in one process happens to compare notes with a lender in another, which is a more damaging discovery than catching it internally first.
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Last reviewed October 2026
Start with the structure, not the pitch.
Tell us the transaction and the timetable. If it is not something we should run, we will say so.