hard · Investment Banking

From the perspective of a NON-tendering ('holdout') noteholder, which statement best captures why this exchange is typically coercive — and what limits that coercion?

1. Holdouts keep their original face and contractual priority, but the exchange primes them structurally by layering new second-lien debt ahead of their now-effectively-subordinated unsecured claim, while remaining capped by the lien-subordination covenant capacity
2. Holdouts are forced to accept the 70% ratio once a two-thirds majority tenders, because the exchange amends the indenture's payment terms via a binding majority vote
3. Holdouts benefit because the $120M of face reduction deleverages the company and lifts the recovery value of their unimpaired unsecured claim above 45 cents
4. Holdouts are unaffected in priority since liens cannot be granted without unanimous consent, so the exchange is purely a voluntary haircut with no coercive effect

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