hard · Corporate Credit Analysis cap-structure
In a 'double-dip' financing structure, what is the primary mechanism used to enhance the recovery of HoldCo lenders?
- The HoldCo receives a first-priority lien directly on all of the OpCo's owned real estate.
- All OpCo operating cash flow is swept in daily into a lockbox account under HoldCo's exclusive control.
- The financial sponsor provides a keep-well agreement to support the HoldCo's scheduled interest payments.
- An intercompany note from OpCo to HoldCo is pledged as collateral for the HoldCo's external debt.
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