medium · Private Equity advanced-lbo
If a sponsor uses a 'Holding Company (HoldCo) PIK' note, where is that debt typically located relative to the operating company's debt?
- It is pari passu in priority with the OpCo's own ordinary trade payables
- It sits 'above' the OpCo debt in the capital structure and holds a first lien on assets
- It is located directly at the operating company level and is classified as Senior Secured debt
- It is structurally subordinated and relies on dividends from the OpCo to be repaid.
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