medium · Private Credit loan-structures-instruments

What does this mean for the lender's recovery?

1. Both the lender and the bank share equally in the subsidiary's own assets under a pari passu sharing structure.
2. The local bank gets paid in full from the subsidiary's assets before the lender receives anything from that subsidiary.
3. The lender is automatically treated as senior to the local bank simply because the parent company owns that subsidiary outright.
4. The lender can safely ignore the local bank's direct claim since the parent company remains the primary named borrower on the loan.

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