They are senior in the capital structure and are trading at a significant discount to parity.
And the capital structure that is right for 1975 isn't necessarily right for 1985 or 1989.
It is senior in the capital structure to equities, and for that reason can be safer.
This latest reduction will leave the capital structure with an implied equity cushion of 50%, sources said.
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There is no junior debt in the capital structure, and that highlights another party fighting for business: mezzanine providers.
Leverage was present both within the structure of the CDO and within the capital structure of many of the buyers.
They should vary the capital structure as their businesses change and markets prefer debt or equity, or a interest rates fluctuate.
By taking on additional leverage in an LBO, a PE fund could unleash value and make the capital structure of the company they take private more efficient.
Their dividends are variable, their cash flows less certain and therefore an equity risk premium should exist which compensates stockholders for their junior position in the capital structure.
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Since September, the average debt multiple through second-lien is a hefty 5.4x, versus 5.1x earlier in the year, with little debt cushion further down in the capital structure.
Distressed debt investors will have to adapt to a surging equity market and a bubble in high-yield loan markets, finding themselves pushed down the capital structure in search for yield.
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It offers governments and taxpayers more security and it reassures counterparties, depositors and debt-holders who are higher up the capital structure and who get a bigger buffer between them and losses.
Given the greater liquidity in the high yield market, some arrangers are a lot more comfortable underwriting senior secured bridge loans to high yield and then flexing and structuring the capital structure based on market demand.
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In the typical capital structure of a venture-backed company, the investors have bought preferred stock, which entitles them to get their money back before proceeds are shared with the management team and other holders of common shares and options.
In a volatile atmosphere like the present you should think of capital structure as a variable that can greatly influence the success or failure of a business enterprise.
Although he accepts some of the theories' limitations, he argues that the professors built the structure for today's capital markets.
With 17 miles of corridors it was easily the biggest office building in the world, and yet the five-story structure was barely visible from the capital on the other side of the Potomac River.
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For instance, if the company looks to raise capital in debt or equity markets in the future, the new structure would allow investors to derive different growth and cost of capital assumptions leading to a higher combined valuation.
Among the changes that could be made: streamlining of banks' regulatory structure, the implementation of capital requirements and increased powers for the Federal Reserve.
Overhauling GM's capital structure is the priority, but the government wants other changes, too.
Just outside Islamabad, the capital, a huge stone structure has been built.
But XTO, with a smaller capital structure than the supermajors', is happy to invest in the neglected fields, using new techniques of 3-D imaging, horizontal drilling and so-called fracture stimulation--blowing open rock formations by injecting mudlike fluids down wells to get at big methane reservoirs.
Here's an actual example of how changing a capital structure can increase the value of a business.
Of the four, Amgen was willing to help Tularik straighten out its capital structure by buying out a major investor who had lost interest, notes the Deloitte report.
Debt supercycles and blowouts manufactured by the Federal Reserve were not factors in capital structure consideration or economic life at all.
Encourage instead the issuance of securities that automatically adjust capital structure when financial distress becomes relevant, such as cocobonds with a market trigger.
Merton Miller and his colleague Franco Modigliani posited their capital structure irrelevance theorem in the late 1950s, when the dollar was as good as gold at least for foreign creditors.
Another factor is the structure of China's capital markets.
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The Ssangyong group has pursued an all-out effort to improve Ssangyong Motor's financial structure through a capital-stock increase and the disposal of property.
If there is going to be a preferential rate for capital gains, people are going to try to structure as much of their income to take the form of capital gain as possible.
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