A capital partner for the subordinate position
A lender may have a property and sponsor it understands while needing a partner to hold a different portion of the risk. H Equities has published B-piece and junior participation transactions. Participation sizing and economics are transaction-specific; a published example is evidence of a structure, not a standing program commitment.
How an A/B structure is organized
In a simplified participation, the senior A position has priority under the agreed payment waterfall and the junior B position bears losses earlier. Both positions relate to the underlying loan. A participation is distinct from a separate mezzanine loan secured by ownership interests. Actual priority and remedies depend on the documents.
- Property cash flow → loan payments → senior A entitlement → junior B entitlement, subject to the negotiated waterfall.
- Losses and recoveries follow the intercreditor or participation agreement; a diagram alone does not establish legal priority.
Topics for the initial lender discussion
Share collateral, sponsor, total loan size, desired retained position, valuation and cash-flow support. Identify who originates and services the loan, whether closing has occurred and whether an existing agreement permits the proposed structure.
- Payment priority, current-pay interest and reserve treatment.
- Major decisions, modifications, extensions and approval rights.
- Default remedies, standstill provisions, cure rights and purchase options.
- Servicing standards, reporting, transfer restrictions and workout costs.
Published participation evidence
The transaction archive includes a $4.5 million B-piece participation in Jupiter Island and a $2.525 million junior participation in Brooklyn. Their pages distinguish the published participation amount from the undisclosed total loan or property capitalization.