Services Provided by SCLLC

Senior debt has always been a mainstay of the private capital markets. SCLLC principals have been active in this market since 1978 in arranging senior debt financing. Senior debt financings range in maturity from three to thirty years and can be executed in the traditional financial institutional, private lender and/or hedge funding markets. Given the strong demand, senior debt can be arranged for as little as $5 million up to more than $500 million. As a leading financial advisor/agent in this product, SCLLC has unique experience and ability to arrange financing for senior debt financing.

• Investment Grade
• Below Investment Grade
• Secured and Unsecured Transactions
• Traditional and 144A Transactions

SCLLC has extensive experience as an advisor to companies seeking mezzanine capital/subordinated debt. This form of financing is used extensively as a component of capitalization in leveraged acquisition financing, where it is usually accompanied by senior debt (provided by banks, hedge funds or institutional investors).

The other frequent use of mezzanine capital is for growth capital, either exclusively or in conjunction with private equity capital. As such, mezzanine capital is typically arranged as a component of a more comprehensive debt structure. Structured in the form of subordinated debt, mezzanine capital has a longer life than senior debt.

Subordinated debt is available for an initial period of seven to twelve years or longer, with an average life range of seven to nine years. Private placements of subordinated debt for non-investment grade companies generally require a higher internal rate of return (“IRR”) to the lender. This IRR can be achieved by a combination of a fixed cash interest rate, payment in kind (“PIK”) interest and some form of “equity kicker”, typically provided through the issuance of warrants. The transaction size for traditional private subordinated debt issuance can be as low as $5 million or as large as $70 million or more.

SCLLC is experienced with all forms of mezzanine capital.

• Subordinated Debt with Detachable Warrants
• 144A and High-Yield Subordinated Debt Underwritings
• Convertible Subordinated Debt
• Redeemable Preferred Stock

Private equity can be arranged for any number of reasons, including:

Private equity can be arranged for any number of reasons including improving the balance sheet to support future growth; financing an acquisition or leveraged buyout; or recapitalizing a company to provide liquidity for existing shareholders. Investors will seek an IRR which varies depending upon the perceived level of equity risk. A five-to-seven-year investment horizon is typical, with most investors requiring a built-in exit mechanism to provide liquidity for their investment. Transaction sizes average from $3 million to $100 million. SCLLC can assist a potential private equity issuer in offering a control stake in a company or a minority interest, as circumstances dictate.

SCLLC works with the issuer company client to identify the most appropriate equity provider, considering current ownership structure, corporate culture, strategic and financial aspirations, and acquisition strategies.