The vast majority of all secondary pawn loans are commitments guaranteed primarily by the borrower. Loans with a second right of pledge differ from both unsecured and subordinated debt. The second loans used in leverage buybacks are used to fill small gaps between the borrower`s financing needs and the maximum thresholds (measured by the different leverage indicators) of the lenders guaranteed in priority. The intermediation fees and interest (financing) of a second pawnshop are higher than those of the same borrower`s first mortgage, since the risk to the lender comes from a subordinated guarantee rate. However, second pledges can often reduce the total cost of capital in a short buyback operation and replace other more expensive forms of financing (e.g.B. priority unsecured debt). The specific rights of the first pledge and the second grantor are defined in the credit agreements concluded between the borrower and each category of lenders, as well as in an intercreditor contract. . .

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