A notable difference between commercial debt and capital markets is the process of arranging the finance. Negotiations with commercial debt providers do not follow a prescribed or regulated procedure. This has the benefit of being more flexible, but can mean that there will be some uncertainty about when negotiations will be completed, and-until the documents are signed- there remains a risk that the lenders could introduce new conditions to the loan, or indeed, on rare occasions, even walk away.
The process for launching a public bond is much more prescriptive and is regulated by the relevant market authority. The main steps in the process are shown in Figure 4.