Obviously covenants could be formed in many different ways, but I was wondering if a LBO doesn't work out after the transaction, is it possible for 2L be paid before 1L in event of liquidation?
And in that scenario, is junior secured or senior unsecured paid first? (Never remembered the order)
| +240 | UBS Layoffs (October 2026) | 70 | 2h |
| +110 | Do people still want to go PE? | 34 | 4h |
| +69 | UBS Tech layoff | 20 | 43m |
| +62 | Bloomberg - New UBS Investment Bankers See Smaller Pay Gain on Promotion | 15 | 15h |
| +46 | Think I'm fucking up my analyst years | 16 | 3d |
| +36 | What Differentiates the Best Analysts as AI Improves? | 9 | 14h |
| +33 | Lazard hirevue | 11 | 16h |
| +26 | Ambitious CC Student trying to break into IB | 14 | 6d |
| +22 | Cornell Club T10 Rankings (UPDATED 10/2026) | 14 | 1d |
| +22 | Quitting After First 4 months | 10 | 2h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Not possible for 2L to get paid before 1L. Even a unitranche it is pari passu.
Secured is paid first in the event of liquidation.
https://www.lw.com/upload/pubContent/_pdf/pub1066_1.pdf
Second one was actually a trick question to eliminate answers like yours
well, unsecured cannot be second lien at issuance- if that's what you're looking for.
Assuming this is OP - do you actually have nothing better to do on a Saturday night than asking a forum a finance question you already have the answer to?
deleted
Non soluta sed nisi quae qui voluptatem provident. Non deleniti numquam voluptatem voluptatem quia quas sint non. Natus omnis natus inventore eveniet dolorem. Veritatis ut reiciendis nesciunt fugiat rerum harum numquam.
Est quas aliquid odio vero voluptatum voluptatem. Velit nulla enim ipsa nostrum qui. Explicabo praesentium sed ipsa hic perferendis.
Rerum magnam et dolor earum iure. Debitis eum accusamus ut praesentium. Sint minima nihil voluptas iste.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...