hard · Corporate Credit Analysis

In a 'Double-Dip' financing structure, how does the new creditor enhance their recovery relative to existing unsecured creditors?

1. By receiving a direct guarantee from the parent and a pledged intercompany note from an operating subsidiary.
2. By using a 'springing' covenant that triggers at a lower leverage threshold.
3. By requiring the borrower to maintain a 100% cash reserve for interest payments.
4. By ensuring their debt is secured by hard assets like real estate and machinery.

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