medium · Private Credit portfolio-management-monitoring-workouts
During a liquidation, a company has 250M in available assets. The capital structure consists of a 200M Senior Secured Term Loan, a 40M Second Lien Term Loan, and 60M in Unsecured Mezzanine Debt.
Which statement accurately describes the recovery for the Mezzanine holders?
- Mezzanine holders receive 10M, representing a 16.7% recovery.
- Mezzanine holders are paid in full because total assets exceed the Senior loan.
- Mezzanine holders are wiped out completely with 0% recovery.
- Mezzanine holders receive 50M as they share pari passu with Second Lien holders.
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