medium · Private Equity pe-core
A company in financial distress is securing a $100M Debtor-in-Possession (DIP) loan. The existing capital structure includes $300M in First-Lien Term Loans.
If the DIP loan is approved with 'Priming' status under Section 364 of the Bankruptcy Code, where does it sit in the priority waterfall?
- Junior to the First-Lien Term Loans, senior to unsecured claims.
- Pari-passu in priority with the existing First-Lien Term Loans.
- Senior only to the equity holders and the subordinated mezzanine debt tranche.
- Senior to all pre-petition debt, including the First-Lien Term Loans.
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