GCP has placed over $250 million in subordinated
debt. Subordinated debt instruments typically
incorporate elements of both debt and equity
securities and are tailored to meet a company’s
specific needs. Subordinated debt allows
a company to leverage its unique financial and
operating strengths while minimizing equity dilution.
Subordinated debt financings are typically structured
with interest paid current and deferred return components. Deferred
return is usually dependent on the borrower’s
future success and can be in the form of equity options
or warrants. The debt may be subordinated either
to specific notes payable – usually bank loans
or to all other debt, and traditionally has fewer
covenants than senior debt. Subordinated debt
typically has a five to seven year maturity with
no principal payments (Bullet Maturity). |
