Senior Secure Debt
Senior secured debt is generally the preferred choice for most borrowers as it is the least expensive form of capital. However, while many operating companies owe their success to valuable intellectual property portfolios, traditional lenders often only concentrate on a firm’s tangible assets when making credit assessments. With an undervalued collateral package, many such borrowers are faced with the choice of either seeking more expensive supplemental options (i.e. second lien, mezzanine or additional equity) or downsizing their capital needs.
Newlight, however, offers a third option – the ability to stretch senior debt by introducing sophisticated lenders that fully appreciate the value of intellectual property and are willing to fund at more appropriate advance rates. This stretch loan incorporates features common to both asset based and cash flow loans, thereby generating greater liquidity at more competitive pricing.