Private credit solutions for transactions that fall outside every standard lending template and why Asia Pacific's mid-market produces more of them than any other region.
Published by
Donald Klip | Co-Founder, Global Mortgage Group | Head, GMG Capital Advisory
30 years of institutional finance. Former hedge fund founder. Senior roles at top global investment banks. GMG Capital Advisory arranges private credit and special situations finance of $10M–$100M for operating companies across Asia Pacific.
[email protected] | +65 9773 0273 | Singapore · Hong Kong | Asia-Pacific
A special situations loan is a corporate debt facility arranged for a business in circumstances that conventional bank lending cannot accommodate. Not because the business is failing. Not because the deal is too risky. But because the transaction falls outside the standardised templates that banks use to approve and process credit.
A special situations loan is not a loan for broken companies. It is a loan for complex situations that banks are not built to handle.
What Makes a Situation 'Special'?
Time pressure: A corporate transaction with a hard deadline that a bank's 8–14 week credit process cannot meet.
Complex ownership or corporate structure: Businesses with multi-jurisdiction holding structures, cross-border operating subsidiaries, or unconventional shareholder arrangements.
Non-standard collateral: Transactions secured by assets that banks cannot or will not accept operating cash flows, project revenues, specialist equipment, intellectual property, or offshore-held assets.
Sector restrictions: Banks maintain growing lists of restricted sectors. A business in hospitality, energy, or cross-border manufacturing may face a sector-level policy regardless of individual deal quality.
Distress or time-critical refinancing: A business facing a debt maturity, covenant breach, or facility withdrawal requiring rapid replacement.
Bridge to a future event: A financing need that exists only until a specific future event: an asset sale, equity raise, or regulatory approval.
Turnaround and recovery: A business emerging from underperformance that cannot yet satisfy bank backward-looking criteria despite a credible forward case.
Special Situations in Asia Pacific: Why This Market Generates So Many
Cross-border complexity: Operating companies spanning multiple jurisdictions create structures that no single bank can underwrite consistently.
Foreign ownership restrictions: Multiple markets impose restrictions that banks treat as a risk multiplier. Private credit lenders with regional expertise can structure around these.
Bank sector exclusions: Growing excluded sector lists affect businesses regardless of individual credit quality.
Family business succession: Asia Pacific has a large population of family-owned businesses undergoing ownership transitions that banks are not structurally equipped to handle.
Infrastructure and project finance gaps: Data centres, power generation, renewables, and logistics generate project-level financing needs between institutional project finance and conventional corporate lending.
Common Special Situations Structures
Senior secured bridge: Short-term facility (12–24 months) secured against identifiable assets, structured around a defined repayment event. The most common special situations structure in the region.
Unitranche: A blended facility combining senior and subordinated debt. Simpler to execute than traditional leveraged structures. Well-suited to mid-market acquisitions and MBOs.
Asset-backed term loan: Medium-term facility (2–4 years) secured primarily against specific assets.
Cash flow-based lending: Facilities sized around EBITDA and free cash flow rather than hard asset collateral. Available for strongly cash-generative businesses.
Mezzanine: Subordinated debt behind senior facilities. Higher yield, more flexible covenants, often used alongside senior debt in acquisitions or recapitalisations.
Collateral in Special Situations Finance
Private credit lenders assess the totality of the security package, not individual line items. Real property across multiple jurisdictions, operating business cash flows, specialist equipment, trade receivables, intellectual property, personal guarantees from HNWI business owners, and offshore-held assets can all be incorporated into a coherent security structure. A transaction combining real property, contracted revenues, personal guarantee, and strong business cash flow can access significantly better terms than the sum of its parts might suggest.
About GMG Capital Advisory
Donald Klip | Co-Founder, Global Mortgage Group | Head, GMG Capital Advisory
Donald Klip has 30 years of institutional finance experience spanning hedge fund management and senior roles at the world’s top global investment banks. GMG Capital Advisory specialises in arranging and structuring corporate debt financing of $10M–$100M for operating companies, asset owners, and project sponsors where conventional bank lending is unavailable, insufficient, or too slow. We operate across 23+ jurisdictions in Asia Pacific.
www.gmg.asia | [email protected] | +65 9773 0273 | Singapore · Hong Kong
The Debt Desk
Corporate private credit intelligence for Asia Pacific’s $10M–$100M middle market. Published by GMG Capital Advisory. Part of the Private Credit Asia content series.
www.gmg.asia | Read all 41 articles in the series
