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Doesn't replacing dated secured debt with undated units of revenues lead to a better outcome for the financier only if the value to the financier of having a more certain payment sooner is lower than the value of having a less certain payment in the future?

What it does is transform the risk of non-payment to the risk of not finding a buyer. If a Unit is redeemable for production, rather than revenue, then there is the option of actually using the production.

IMHO Units redeemable in energy or land rental value score highly in terms of their use value to the owner/investor.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Mar 23rd, 2009 at 03:40:38 PM EST
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