medium · Private Equity advanced-lbo

What does this indicate?

1. It is a specialized insurance policy or guarantee contract that ensures full debt repayment in the event of a company default.
2. It is the senior-most debt tranche in the capital structure that holds the power to unilaterally block any proposed restructuring plan.
3. It is the class of debt most likely to be converted into equity during a reorganization because the company's value ends at that layer.
4. It is the common equity tranche, which retains all remaining upside potential once the outstanding debt is fully refinanced.

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