Mezzanine creditors will determine restructurings

Author: | Published: 4 Mar 2009

In this wave of restructurings, the key players will be the fulcrum creditors – those whose place in the capital structure is where the value of the company breaks.

This will often be the mezzanine lenders, with the senior creditors above fully in the money and the subordinated bondholders below standing to get little.

Any change in the ongoing value of the company will directly affect how much these mezzanine lenders get out of a deal. The senior creditors might be relatively indifferent to the result.

“Restructurings now are all about value. Where does the value break...