Question about how lenders decide on the capital structure of a loan.
How does a lender decide how much they are willing to lend out as senior debt, or if they should split the senior debt into senior and a B-note and/or additional mezzanine financing? 
[{"id": "dflkybf", "text": "All really depends. Sometimes credit is only comfortable with the senior piece up to a certain proceeds level and we backfill the request with Mezz.\n\nIn the term of A vs B notes, on large loans in CMBS world there is an idea of barbelling the pool with low leverage A notes", "replies": [], "depth": 1}, {"id": "dflrzxb", "text": "Depends on, among other things:\n\n-The Day\n-The Strength of the Borrower\n-The Strength of the deal\n-The Credit of the borrower\n-The Credit of the deal pieces (tenants, owners, etc.)\n-The Lenders \"box\" (some lenders have a limited capacity in which they lend. Others are more creative and are given more latitude.\n-Mezz pieces will typically come from a different lender than the senior piece\n-Rate environment\n-Market environment\n\nThere's just too many moving pieces to give you one direct answer. But those are some of the more major things lenders will consider. ", "replies": [], "depth": 1}, {"id": "dfm2s8c", "text": "what the others are saying are correct, but it comes down to the borrower needing proceeds that are in excess of what the bank can provide on the senior debt. The senior portion is structured around DSC, LTV, debt yield, etc. If the borrower needs additional proceeds for acquisition or repositioning, then their only choice is through subordinate debt.  \n\nFrom my experience, the senior portion is pretty straightforward, but the subordinate pieces are where you get more into the art of lending and away from the science. ", "replies": [], "depth": 1}]