This was an extraordinary transaction and continues to demonstrate our ongoing ability to create off balance sheet value through our equity kickers
," said Ivan Kaufman, chairman and cCEO of Arbor.
Under existing interpretations of law, national banks may--in addition--take so-called equity kickers
as part of loan agreements.
The present paper develops a formal rationale for the choice of capital structure made by the organizers of the buyout, including the use of such arrangements as strip financing and equity kickers.
The model is expanded in Sections III and IV in order to allow for a positive probability of default in equilibrium and to examine the role of strip financing and equity kickers.
Lenders accepting a below-market interest rate on their loans in exchange for equity kickers will find their interest aligned with promoters', if the kickers are sufficiently large.
Therefore, with an equity kicker, a strip financing arrangement can be implemented with each lender holding a smaller fraction of the equity than when debt is correctly priced.
, contingent interest, significant deferral
CCA's software allows clients to evaluate and create securities-offering documents for deal structures including common equity, notes with equity kickers
, participating preferred shares, and common equity with bank debt.
The lender has the safety of a mortgage, albeit subordinated to a first mortgage, and can get higher returns as well as equity kickers
The debt investments are typically structured as non-recourse to the sponsors, with royalty or other equity kickers
CommVest's investments take the form of senior or subordinated debt, or leases, always structured in combination with equity kickers
yield private placements with equity kickers