hard · Debt Capital Markets
A 'Bridge-to-Bond' facility is provided by a bank group to a sponsor for an acquisition.
If the high-yield market remains 'shut' for 12 months, what typically happens to the bridge loan?
- The interest rate is fixed at the initial commitment level forever.
- The lenders receive 100.0% of the company's equity.
- It converts into a senior term loan with a maturity of several years.
- It is immediately called and the borrower must find new lenders.
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