medium · Debt Capital Markets bond-instruments-structures

In the context of a corporate restructuring, what is the 'fulcrum security'?

1. The residual equity layer that somehow retains its full value all the way through the bankruptcy proceedings.
2. The revolving credit facility that supplies the company with critical day-to-day operating liquidity during the entire restructuring period.
3. The specific class of debt that is only partially covered by the company's enterprise value and likely to convert to equity.
4. The most senior class of secured debt that is fully covered by the firm's total enterprise value at recovery.

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