Second Lien Debt Opportunities in the Lower Middle Market

Date: Sep 01, 2016 @ 07:00 AM
Lower middle-market second lien debt fills a much needed capital void by providing a product that is subordinated to an ABL or senior cash flow loan and that is subject to an inter-creditor agreement and traditionally in the form of an amortizing loan with a term that ranges from 12 to 36 months. This lending product intersects where ABLs and senior cash-flow lenders fall short when it comes to providing additional availability and leverage multiples and where traditional mezzanine lenders either can’t deploy enough capital on a per deal basis or can’t get comfortable with a lower level EBITDA threshold.