How does the Priority of Claims process affect me?
Debt to Equity: How much water is reserved upstream?
If you are a bondholder or secured creditor, you have security against the assets. It is important that the total debt is less than the value of the assets and it is very beneficial to have a good sized buffer in place too.
Exempt Market vs. Traditional Markets
- Traditional Markets - Bonds generally trade good security for lower returns and vice versa then issue shares and stock for remaining opportunity for excess return with no security. Often shareholders/stockholders are lower priority than the principals of the firm.
- Exempt Market - Good, reputable firms can issue bonds and/or shares to investors so that they have both security against the assets through the bonds and potential for growth through the shares. In all cases, we ensure that the debt to equity is well in the favour of the investor. (Note: Not all exempt market investment firms operate in this manner or ensure that proper security exists. Ensure your advisor or exempt market dealer are qualified to properly inspect the security and structure so that you remain protected.)