Bridge Loan is a term used frequently in investment banking,and . It is a loan which is used to enable a firm to undertake an acquisition / takeover / / IPO.
In anor other corporate acquisition-type activity, the PE or VC firm will go to the to seek a , then will make the purchase of the target company. The firm will then use its newly acquired target to issue corporate high-yielding bonds to pay off the , and then will use future cash flows to pay the bond yields.
In an IPO, theis secured in order to ensure that the company can continue operating whilst it navigates through the tumultuous time of IPO'ing onto the stock market. The company will give the some stock at a cheap price in order to pay off the , and the sells the stock (if it so wishes) in order to recoup its loan.
- Free Cash Flow (FCF)
- Investment Banking Division ()
- Initial Public Offering (IPO)
- Leveraged Buyout (LBO)
- Private Equity (PE)
- Venture Capital (VC)