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)
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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?
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