Page 7

Capital Structure – Rank, Security and General Terms  Spreading a company’s capital structure means listing all of the firm’s obligations, with secured debt first (in order of seniority) and unsecured debt second (in order of seniority; senior vs. subordinated) CLASSIFICATION

TYPE OF DEBT

SECURITY

DURATION

TYPICAL HOLDERS

Senior Secured Bank Debt

Revolving Credit Facility / First Lien Term Loan

A/R, Inventory, Equity, PP&E

1 - 5 yrs

Commercial Banks

Senior Secured Bank Debt

Second Lien Term Loan / Third Lien Term Loan

PP&E, Equity

3 - 5 yrs

Commercial Banks and HF

Senior Secured Bank Debt

Senior Notes / Subordinated Notes

Unsecured obligations, with recourse

5 - 20 yrs

Institutional Holders and HF

Equity

Unsecured obligations, no recourse

5 - 20 yrs

Institutional Holders and Sponsors

Senior Secured Bank Debt

CoachingAssembly. All rights reserved. Any unauthorised copying, duplication, reproduction, re-selling, distribution or other commercial use will constitute an infringement of copyright

7

Coaching assembly overview of restructuring  

Coaching assembly overview of restructuring

Advertisement