Module V· Sources & Uses (Strategic Acquirer)Advanced
Question

What is a bridge loan in M&A, and how is it typically refinanced?

Answer

A bridge loan is short-term committed financing used to ensure the buyer can close the acquisition before permanent financing is arranged. It is typically refinanced with bonds, term loans, equity issuance, asset sales, or cash flow. Bridge loans are expensive and include ticking fees, duration fees, and market flex, so buyers aim to take them out quickly.