equity kicker

(redirected from Equity Kickers)

Equity kicker

Stock warrants issued attached to a new debt, preferred or common stock issue to improve the salability of the issue.

Equity Kicker

An option to purchase stock attached to a bond. A bond issuer may attach an equity kicker as a sweetener to encourage investment in the bond.

equity kicker

An addition to a fixed-income security that permits the investor to participate in increases in the value of equity ownership. Two common types of equity kickers are a convertible feature on some bonds that allows the bonds to be exchanged for shares of stock, and warrants to purchase stock that are sold in combination with a new bond issue. Compare real estate certificate of deposit.
References in periodicals archive ?
One of the main reasons for the growing prominence of mezzanine financing is that it not only generates return from interest payments but also offers equity kickers, which broadly depends on the deal structuring of each investment opportunity.
"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.
The exemption in the new treaty does not apply to: (1) contingent interest (e.g., payments based on turnover, income, net earnings ("equity kickers"), cash flow or the financial position of the debtor or a related party); or (2) an excess inclusion with respect to a REMIC; these are subject to the U.S.
Under existing interpretations of law, national banks may--in addition--take so-called equity kickers as part of loan agreements.
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. This is done by adding states of nature which result in low cash flows.
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.
The higher return on equity necessary to offset the lower return on debt is referred to as an "equity kicker." Let [Pi] be the value of equity transferred to bondholders.
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.
equity kickers, contingent interest, significant deferral
The lender has the safety of a mortgage, albeit subordinated to a first mortgage, and can get higher returns as well as equity kickers. JLW, working with a large Middle Eastern bank, has put together a fund to make participating loans on U.S.