In commercial real estate financing, purchasers of the subordinate tranches, or second and third mortgages.If a borrower defaults,the B-note investors will suffer losses before the investment-grade tranches.As a result,such investors scrutinize deals more thoroughly,charge higher interest rates commensurate with their increased risk,and typically retain powers to protect themselves somewhat in the event of default.These rights include
• The right to approve modifications to the agreement
• The right to insist on foreclosure in the event of default
• Certain limited cure rights to keep a loan current and avoid foreclosure