Debt Hierarchy
Been studying some levfin and was wondering how I would answer the debt hierarchy question. This is what I have so far Revolver/ bank debt/ senior secured/senior unsecured/ mezz/ common equity. Correct me if it is wrong. I have read some places that unsecured or high yield bonds are higher in the hierarchy than mezz. I always thought mezz was last before common equity. Also is preferred stock essentially the same as mezz. Sorry just the verbiage is a little confusing and kind of contradicts each other different places I read. Any help would be appreciated.
From BIWS
1. New debtor-in-possession (DIP) lenders
2. Secured creditors (revolvers and “bank debt”)
3. Unsecured creditors (“high-yield” bonds)
4. Subordinated debt investors (similar to high-yield bonds)
5. Mezzanine investors (convertibles, convertible preferred stock, preferred stock, PIK)
6. Shareholders (equity investors)
also, sources saying HY bonds are higher in hierarchy than mezz means they come before mezz, it doesn't contradict with mezz being last before equity
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