And if these companies can't service that debt, the bondholders walk away with what's left, and
the equity holders get nothing.
Not exact matches
We weren't able to
get a bank loan until 1991, when half of our debt
holders had converted to
equity.»
The model «Convertible Security» Yokum has published also incorporates that clever feature of more sophisticated note templates, whereby the
holder of the convertible instrument
gets no more preferred
equity for her investment than does the new money in the Qualified Financing, and takes her discount in the form of common shares.
The optimal outcome is that you
get paid principal & interest to the stated maturity from this bond that is deep in junk territory, CCC + / Caa1 - rated, where the proceeds of the deal don't increase the value of the firm, but are paid as a dividend to the
equity holders.
How better to
get a government guarantee and increasing prices of those bonds then take the
equity holders out.
Assume, in the case of an
equity portfolio, that the
holder has designs on
getting control of some of the issuers whose common stock is in the portfolio.
Account
holders, depending on the balances they maintain, also
get preferred rates on CDs, personal loans, home
equity loans and home
equity lines of credit.
But the breakup will put enough
equity (they call it reserves in insurance - speak) to
get the munis an AAA; that will disadvantage the remaining policy
holders.
This means that the policy
holder makes much more money on the sale, but the new owners are still
getting instant
equity.
How you are compensated, other activities you are supporting the syndicate (due diligence, investor relations, etc) is important and being an
equity stake
holder (part of the general partnership) are areas to
get an understanding in.
Another problem that all this creates it that the banks know that most of these kinds of HELOCS are uncollectable as there is not enough
equity to foreclose on the second to any benefit to the HELOC bank since the first note
holder needs to
get paid first.