Phoenix LXVIII - "Watch out for that Tree"
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01-25-2013, 12:09 PM
Join Date: Nov 2009
Location: Bay Area, CA
Originally Posted by
It is an awfully big bite, but if someone like an MSD Capital (for example) can be convinced to lend the money (at a preferable rate to the lender), the risk on that loan to the financier is probably a bit less given that a civic government is theoretically underwriting a portion of the business risk and given that revenue sharing payments could increase with the additional new revenue share welfare funds that came out of the new CBA. That thumbnail risk assessment excludes the possibility of a future civic default of course.
I defer to OA, Barney and the finance guys but I’m with M4B on this. It seems to me that in that scenario an entity such as MSD would be a senior secured debt, which would likely defeat the purpose as the JIG “owners” would be subordinating their position in order to close the transaction. That doesn't seem like a very sound investment strategy. Because
if the franchise tanked again, the music would stop and the JIG investors would be left without a chair.
I'm pretty far out of my depth on all this, so I'll shut up now.
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