Indeed, the more intense focus on loans is giving
subordinated debt lenders more financing opportunities as the need for additional capital grows among borrowers.
Borrowers can't always get what they want The commercial real estate mortgage market's big push to re-introduce underwriting discipline among senior lenders has jolted the investment world, giving
subordinated debt lenders more leverage to deny aggressive borrowers.
Mezzanine and other
subordinated debt lenders couldn't be happier.
Not exact matches
For example, a project with 70 percent bank
debt, 10 percent
subordinated debt and 20 percent equity, could be viewed by the senior
lender as a project having roughly 70 percent bank
debt and 30 percent equity.
«Often, these loans can be considered equity participation because they'll
subordinate the
debt to the private
lender, which will encourage the
lender to lend more,» Rassel explains.
In many cases, companies have several different types of
debt, and some of these
lenders may be
subordinate to others.
In such a structure, the investment grade ratings for senior
debt helps the DOT evaluate its credit risk as a
subordinate lender.
Because senior
debt has a relatively secure claim, it is less risky from the point of view of the
lender and, thus, pays a lower rate of interest compared with
debt of the same issuer having a
subordinate claim.
To senior
lenders,
subordinated debt is a form of equity.
Longview is still facing negative cash flow but has managed to win «financial convenient relief» from its
lenders and secure an additional $ 30 million in deeply
subordinated unsecured
debt.
Malcolm has extensive experience representing
lenders and borrowers in secured and unsecured
debt financings, including syndicated senior bank credit facilities, first and second lien financings, asset - based (ABL) credit facilities, mezzanine and other
subordinated debt financings, debtor - in - possession financings, public and Rule 144A
debt offerings, and convertible
debt transactions.
Klayman regularly represents
lenders and borrowers in leveraged finance transactions involving senior, mezzanine and
subordinated debt and equity offerings and co-investments, as well as in general lending matters.
A higher leveraged financing option typically used when the existing senior
lender prohibits
subordinated debt financing.