The 56th annual World Series of Poker starts next week and at the beginning of the tournament, every player is told the same thing:
Green chips = $25
Black chips = $100
Blue chips = $500
Yellow chips = $1,000
Orange chips = $5,000
Dark Green chips = $25,000
Lavender chips = $100,000
Now, here’s the critical part: chip values don’t change while you’re playing at the table—if they did, it’d be pretty hard to win.
As absurd as it sounds: in 𝟯𝟮% 𝗼𝗳 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗱𝗲𝗮𝗹𝘀 𝗶𝗻 𝗤𝟭, 𝗳𝗼𝗹𝗸𝘀 𝗲𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲𝗹𝘆 𝗽𝗲𝗿𝗺𝗶𝘁 𝗰𝗵𝗶𝗽 𝘃𝗮𝗹𝘂𝗲𝘀 𝘁𝗼 𝗰𝗵𝗮𝗻𝗴𝗲 𝗺𝗶𝗱-𝗴𝗮𝗺𝗲. Let me explain. 🃏
𝗔𝗹𝗹 𝗹𝗲𝗻𝗱𝗲𝗿 𝗰𝗼𝗻𝘀𝗲𝗻𝘁 𝗳𝗼𝗿 𝗽𝗿𝗼 𝗿𝗮𝘁𝗮 𝘀𝗵𝗮𝗿𝗶𝗻𝗴 𝘁𝗲𝗿𝗺𝘀 in capital markets transactions effectively limit changes in 𝗽𝗿𝗼 𝗿𝗮𝘁𝗮 𝘀𝗵𝗮𝗿𝗶𝗻𝗴 𝗮𝗺𝗼𝗻𝗴 𝗹𝗲𝗻𝗱𝗲𝗿𝘀 𝘁𝗼 𝘂𝗻𝗮𝗻𝗶𝗺𝗼𝘂𝘀 𝗰𝗼𝗻𝘀𝗲𝗻𝘁. Without it, majority lenders could vote to pay themselves more of the issuer's payments with minority lenders getting less—𝗶𝗻 𝗼𝘁𝗵𝗲𝗿 𝘄𝗼𝗿𝗱𝘀, 𝗹𝗲𝗻𝗱𝗲𝗿𝘀 𝘁𝗵𝗼𝘂𝗴𝗵𝘁 𝘁𝗵𝗲𝘆 𝗵𝗮𝗱 𝗮 𝗹𝗮𝘃𝗲𝗻𝗱𝗮𝗿 𝗰𝗵𝗶𝗽 𝘁𝗵𝗮𝘁 𝘁𝘂𝗿𝗻𝘀 𝗼𝘂𝘁 𝘁𝗼 𝗯𝗲 𝗮 𝗴𝗿𝗲𝗲𝗻 𝗰𝗵𝗶𝗽.
The numbers for Q1 ‘25 tell an intriguing story:
→ These protections appeared in 𝗼𝗻𝗹𝘆 𝟲𝟴% of deals in Q1 '25
→ That's up from Q4 '24, but still 𝗯𝗲𝗹𝗼𝘄 𝘁𝗵𝗲 𝟴𝟭% 𝗽𝗲𝗮𝗸 in Q2 '24
→ Over the past two years, these terms have consistently been in 𝗮𝘁 𝗹𝗲𝗮𝘀𝘁 ~𝟲𝟬% of deals
Not all deals need this protection—single-lender facilities and bridges get a pass. But in true syndicated deals? It's a basic protection for lenders.
Download Noetica's complete Q1 '25 Capital Markets Radar report for more. Link in comments. ⬇️
