Pushing the Cushion (The Deal.com)

"The total dollar value of outstanding second-lien credits has exploded in the past few years, going from $570 million in 2002 to over $16 billion in 2005. Through May of this year, total second-lien loan volume was $9.9 billion, according to Dealogic, an 83 percent increase over last year. Over the same period, the average size of second-lien transactions jumped 43 percent to $142 million."

"Second-lien borrowing is an attractive alternative for CFOs because it typically offers better terms than subordinated debt and allows companies to tap an unused portion of its assets for use as collateral. At the same time, it is attractive to lenders because it is a secured asset, making it less risky than standard mezzanine finance positions."