Two questions for the forum:
- Assuming a non construction loan, what are the main factors why a lender would require a full or partial recourse provision to the borrowing entity vs not requiring? I've seen many term sheets where the same lender had multiple quotes, some requiring recourse and others without. Debt funds don't generally require recourse (which is one reason borrowers are willing to pay more on rate). Is the idea that banks require it because they are regulated, more conservative, cheaper spreads in exchange for the person guarantees?
- Net net, what have people seen in terms of pricing premium to go from full recourse to non recourse? i.e. is there a good rule of thumb from a spread perspective if I wanted to price two loans that offer exactly same terms except one is full recourse the other is non?
following, interesting question.
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