Structures

Guidance

Preferred EquityPreferred EquityA direct or indirect equity investment in an entity providing that investor with preferred rights to receive dividends, distributions, payments, or returns relative to other equity owners. may be structured in a variety of ways, and appear similar to a traditional equity investment, while having rights or remedies similar to debt, such as Mezzanine FinancingMezzanine FinancingSubordinate debt financing provided to a direct or indirect owner of a Borrower that is secured by a pledge of the direct or indirect equity interest in the Borrower held by the owner, and not by a Lien on the Property. .

To determine if the Preferred EquityPreferred EquityA direct or indirect equity investment in an entity providing that investor with preferred rights to receive dividends, distributions, payments, or returns relative to other equity owners. is Soft or Hard, you should analyze the:

• Borrower’sBorrower’sPerson who is the obligor per the Note. organizational and capital structure;
• Borrower’sBorrower’sPerson who is the obligor per the Note. applicable joint venture or operating agreement with the Preferred EquityPreferred EquityA direct or indirect equity investment in an entity providing that investor with preferred rights to receive dividends, distributions, payments, or returns relative to other equity owners. provider; and
• rights and remedies of the direct and indirect equity owners against the BorrowerBorrowerPerson who is the obligor per the Note. .