Where does value break?

A company with $1.4bn of debt against an uncertain enterprise value. Drag the value and watch which claim gets left holding the equity.

$905mm
Revolving credit facility$150mm
100%
First lien term loan$600mm
100%
Second lien term loan$250mm
62%
Senior unsecured notes$400mm
0%
Common equityresidual
0%

Value breaks at the second lien term loan.

Identifying the fulcrum is one of the first things asked in a restructuring interview, and one of the last things anyone agrees on in a real negotiation. More of what we cover.