Term: Fulcrum security

In a bankruptcy restructuring the senior-most security that will likely convert into an ownership or equity stake. Distressed and turnaround investors often try to acquire what they predict will be the fulcrum security because it would mean firstly they they will not be wiped out once the company is restructured and secondly that they will be awarded a potentially lucrative ownership in the restructured company. As in: Our bet is that the second-lien loan will be the fulcrum security in the restructuring.

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