{"version":3,"file":"investmentTypes-535aa2e5.js","sources":["../../../app/frontend/assets/documentation/articles/investmentTypes.js"],"sourcesContent":["export const investmentTypes = {\n  order: 2,\n  name: \"Investment types\",\n  keywords:\n    \"deal sale financing senior junior mezzanine partial recap foreclose assume equity payoff retire defease defeasance note loan\",\n  subcategory: \"Investments\",\n  markdown: `# Investment types\n\n  Tower Hunt supports many common {% inlineRouterLink articleId=\"the-role-of-investments\" %}investment{% /inlineRouterLink %} scenarios. Below are \"before\" and \"after\" {% inlineRouterLink articleId=\"understand-the-capital-stack\" %}capital stacks{% /inlineRouterLink %} for each.\n\n  {% callout type=\"info\" %}\n  **Note:** These examples focus on the important capital stack changes caused by each type. Please keep in mind that, in practice, each example can present in a variety of ways (ex. with or without debt, single or multiple owners, etc.).\n  {% /callout %}\n\n  ## Outright sale\n\n  When an ownership group sells its entire position to a new group, it is often called an *outright sale*.\n\n  {% beforeAfterCapitalStack investmentType=\"outrightSale\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer %}\n  1. Click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears at the top-right of the equity layer on the \"before\" side of the capital stack.\n  2. Click {% inlineAppIcon iconName=\"dollar\" /%}**Sell**.\n  ![Outright sale GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  ### Assuming existing debt\n\n  Some loans can be assumed, allowing an equity buyer to take over the borrower's responsibilities with the existing lender.\n\n  {% beforeAfterCapitalStack investmentType=\"assumeExistingDebt\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer %}\n  1. First, trigger an outright sale. Do not save it yet.\n  2. From the \"before\" side of the {% inlineRouterLink articleId=\"deal-hub\" %}Deal Hub{% /inlineRouterLink %} capital stack, click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears at the top-right of the existing loan layer.\n  3. Click {% inlineAppIcon iconName=\"rightArrow\" /%}**Assume loan**.\n  4. The existing loan now appears on the \"after\" side of the capital stack.\n  5. Save the outright sale investment. The existing loan is not retired.\n  ![Loan assumption GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  ## Partial interest sale\n\n  When less than 100% of the ownership is sold, it is often called a *partial interest sale* or *recapitalization* (recap). There are two common scenarios: when a single owner brings in a partner and when a partner sells its interest to a new partner.\n\n  ### Bringing in a partner\n\n  This example shows a single owner selling part of its interest to a new partner.\n\n  {% beforeAfterCapitalStack investmentType=\"partialInterestNewPartner\" /%}\n\n  It is also possible for an existing ownership group to bring in an additional partner.\n\n  {% beforeAfterCapitalStack investmentType=\"partialMultiInterestNewPartner\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer %}\n  1. Click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears to the right of a company on the \"before\" side of the capital stack.\n  2. Click {% inlineAppIcon iconName=\"partialInterest\" /%}**Sell partial interest**.\n  3. **Optional**: If multiple owners are participating in the partial interest sale, repeat steps 1 & 2 for each additional seller **while editing the new investment in the \"after\" side of the capital stack**.\n  ![Partial interest net new sale GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  ### Replacing a partner\n\n  Sometimes, one partner will remain in the capital stack while another sells its interest to a new investor.\n\n  {% beforeAfterCapitalStack investmentType=\"partialInterestReplacePartner\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer %}\n  1. Click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears to the right of a company on the \"before\" side of the capital stack.\n  2. Click {% inlineAppIcon iconName=\"partialInterest\" /%}**Sell partial interest**.\n  ![Partial interest replacement sale GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  ## Loan origination\n\n  As the name suggests, this investment type results in a new loan being placed on the asset. This is also called a *financing*. Loans have different levels of *seniority* that correspond to their position in the stack. The bottom-most layer (first to be repaid) is the *senior* loan.\n\n  {% beforeAfterCapitalStack investmentType=\"loanOrigination\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer %}\n  1. When no other loans are present in the capital stack, click the **+ Loan** button that appears at the bottom of the equity layer to begin adding a new senior loan.\n  ![Senior loan origination sale GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  ### Junior loans\n\n  Each debt layer above the senior is called a *junior* (or *mezzanine*) loan. The name is less important than knowing the position in the stack. These are just a few examples:\n\n  {% beforeAfterCapitalStack investmentType=\"juniorLoanOrigination\" /%}\n\n  **Or**\n\n  {% beforeAfterCapitalStack investmentType=\"juniorLoanOrigination2\" /%}\n\n  **Or**\n\n  {% beforeAfterCapitalStack investmentType=\"juniorLoanOrigination3\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer %}\n  1. When a senior loan is present, click the **+ Loan** button that appears between layers to begin adding a new junior loan.\n  ![Senior loan origination sale GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  ## Refinancing\n\n  When existing loans are paid off (*retired*) and replace by a new loan, it is called a *refinancing*. Generally, all existing debt is retired during a refinancing. The example below shows a senior and junior loan being replaced by a new senior loan.\n\n  {% beforeAfterCapitalStack investmentType=\"refinancing\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer marginStyles=\"mb-4\" %}\n  1. Click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears at the top-right of the **equity layer** on the \"before\" side of the capital stack.\n  2. Click {% inlineAppIcon iconName=\"circularArrows\" /%}**Refinance**.\n  ![Refinancing GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  {% callout type=\"tip\" %}\n  **Tip:** If the refinancing places multiple layers of debt (senior and junior), save the new senior loan first and then add junior loans to the updated capital stack {% inlineRouterLink articleId=\"create-an-investment\" %}using the same closing date{% /inlineRouterLink %}.\n  {% /callout %}\n\n  ## Loan payoff / defeasance\n\n  Occasionally, a loan is paid off (*retired*) and not replaced. Depending upon the type of loan, this can be called *defeasance*. Regardless of the name, in Tower Hunt the result is that the loan gets removed from the capital stack.\n\n  {% beforeAfterCapitalStack investmentType=\"retireLoan\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer marginStyles=\"mb-4\" %}\n  1. Click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears at the top-right of the **debt layer** on the \"before\" side of the capital stack.\n  2. Click {% inlineAppIcon iconName=\"cash\" /%}**Retire / Defease**.\n  ![Retire loan GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  {% callout type=\"caution\" %}\n  **Important:** {% inlineRouterLink articleId=\"investment-types\" sectionName=\"Refinancing\" %}Refinancings{% /inlineRouterLink %} and {% inlineRouterLink articleId=\"investment-types\" sectionName=\"Outright sale\" %}outright sales{% /inlineRouterLink %} **automatically** retire any existing debt. So, it is only necessary to manually retire a loan if no other investment is taking place.\n  {% /callout %}\n\n  ## Loan sale\n\n  Loans (specifically, the *notes*) are sold for various reasons. In Tower Hunt, each loan is an asset with its own {% inlineRouterLink articleId=\"understand-the-capital-stack\" sectionName=\"Nested capital stacks\" %}nested capital stack{% /inlineRouterLink %}. This makes it a bit easier to understand what is happening: the equity layer of the loan is being sold to a new investor, as in an {% inlineRouterLink articleId=\"investment-types\" sectionName=\"Outright sale\" %}outright sale{% /inlineRouterLink %}.\n\n  {% beforeAfterCapitalStack investmentType=\"loanOutrightSale\" /%}\n\n  ### Steps to use\n\n  {% tablessContainer marginStyles=\"mb-4\" %}\n  1. Click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears at the top-right of the **debt layer** on the \"before\" side of the capital stack.\n  2. Click {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Sell**.\n  ![Retire loan GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  ## Foreclosure\n\n  When a borrower fails to meet its loan obligations, its lender can pursue foreclosure. While there are many varieties of and legal complexities with foreclosure, **Tower Hunt is really only focused on the ultimate outcome**: the borrower and the defaulted loan are removed from the capital stack and a new owner comes in. Sometimes, the new owner was the lender on the loan:\n\n  {% beforeAfterCapitalStack investmentType=\"foreclosure\" /%}\n\n  Sometimes, the lender quickly sells the equity position to another investor:\n\n  {% beforeAfterCapitalStack investmentType=\"foreclosure2\" /%}\n\n  The preferred way to model this depends on when you become aware of the situation:\n  - If the former lender has taken control of the asset and may or may not sell it, we recommend entering the lender as the new owner.\n  - If a third party has already acquired the asset from the lender (especially if that process happened quickly), we recommend entering the third party as the new owner.\n\n  ### Steps to use\n\n  {% tablessContainer marginStyles=\"mb-4\" %}\n  1. Click the {% inlineAppIcon iconName=\"arrowsLeftRight\" /%}**Deal actions menu** that appears at the top-right of the **debt layer** on the \"before\" side of the capital stack.\n  2. Click {% inlineAppIcon iconName=\"key\" /%}**Foreclose**.\n  ![Retire loan GIF](https://assets.towerhunt.com/site/Transparent_dark_lines_T0.png)\n  {% /tablessContainer %}\n\n  {% callout type=\"tip\" %}\n  **Tip:** If the former lender is entered as the new owner, you can easily model a subsequent {% inlineRouterLink articleId=\"investment-types\" sectionName=\"Outright sale\" %}outright sale{% /inlineRouterLink %} if/when that happens.\n  {% /callout %}`,\n};\n"],"names":["investmentTypes"],"mappings":"AAAY,MAACA,EAAkB,CAC7B,MAAO,EACP,KAAM,mBACN,SACE,+HACF,YAAa,cACb,SAAU;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA;AAAA,iBAyLZ"}